Superintendent Felipe Napoles Jr., who was demoted to chief inspector, was caught in possession of a Mitsubishi L-300 van in 1999 when he was still with the Camarines Norte provincial police office.
Napoles said he will seek reconsideration, denying any wrongdoing. He remains chief of the Makati police.
He said a criminal case against him on the same charge had already been dismissed.
In 1999, seven officers of the Camarines Norte polices traffic management division, who were investigating the theft of a van, had filed an administrative complaint against Napoles seeking his summary dismissal after finding the van in his possession.
They found that the vans engine and chassis serial numbers had been erased and replaced. The van was on the police list of reported stolen vehicles and traced to its owner in Manila.
Napoles claimed he did not know that the vehicle was stolen. He said no one had claimed ownership of the van.
In 2001, the Philippine National Police (PNP) found Napoles liable and ordered him demoted. Napoles, while continuing to claim innocence, made an appeal saying the punishment was disproportionate.
But his appeal was rejected. A disciplinary board emphasized that police officers first priority is to uphold the publics interest.
Dismissing Napoles defense that he did not know that the vehicle was stolen, the board ruled that he should have examined the van and verified its origins when he bought it.
Reached for comment, Napoles said he wants the demotion put on hold as long as legal remedies remain. "I have not yet seen an official copy of the decision. But upon receipt I, through my lawyers, will file a motion for reconsideration," he said.
In a statement, Napolcom said Napoles demotion was part of its "continuing effort to professionalize and enhance the image of the Philippine National Police."