Total ban

After 10 long years, the Supreme Court has finally decided that a 2002 ban on the importation of used motor vehicles is constitutional. Yet government officials and importers continue to argue. Take the shipment of 200 or so second-hand vehicles that arrived last week at Port Irene in Sta. Ana, Cagayan, and the 400 others now at sea and headed for the same port.

Customs Commissioner Ruffy Biazon said he had ordered customs personnel at Port Irene—known to be the turf of the Enrile family—to stop the release of the used vehicles. But he said the customs bureau had to seek a certificate of finality on the Supreme Court’s Jan. 7 ruling, and only on such issuance would it “enforce whatever provisions and implementing rules [Executive Order 156] provides.” Then there are the outrageous excuses. Nilo Aldeguer, senior deputy administrator of the Cagayan Economic Zone Authority, said the shipment of more than 200 vehicles from Incheon, South Korea, was covered by an import permit issued before the high court handed down its ruling. Another preposterous reasoning was aired by a leader of the regional automotive industry and a lawyer for the importing companies. They were quoted as saying that the shipment was not imported by Forerunner MultiResources Inc., the party to the case covered by the high court’s ruling, but by another company under the provisions of another EO that supposedly allowed the entry of used vehicles.

But how can EO 156, issued by then President Gloria Macapagal-Arroyo in 2002, cover only one company? It is very clear that it bans the importation of used cars by any company anywhere in the country. Another lawyer for the importers was also reported as saying that the Supreme Court had yet to rule on EO 156’s constitutionality, supposedly having ruled only on the issue of the injunction on the directive.

Arroyo issued EO 156 in response to the call of local assemblers to curb the importation of used vehicles and boost domestic car production. Their call was prompted by the decline in new car sales due to the heavy importation of used vehicles, most of which entered the country through the economic zones and free ports. But importers claimed that the directive was unconstitutional and sought a temporary restraining order from the regional trial court in Aparri, Cagayan, which later upheld the import ban. The case reached the Court of Appeals, which decided in September 2010 to lift the ban. But last Jan. 7, the Supreme Court’s second division set aside the appellate court’s ruling and affirmed that of the Aparri court.

The local car industry, which directly employs more than 70,000 workers in the assembly and auto-parts manufacturing sectors, had been complaining that imported used vehicles stunted its growth. Vehicle assemblers noted that more than half of the units registered with the Land Transportation Office were imported used cars. In 2002, there were 113,287 imported units registered with the LTO, as against 85,594 units sold by the local industry. The car-assembly sector took its worst beating in 2004, when its share in the total LTO registrations slumped to 40 percent; it sold only 88,075 units against 129,425 units sold by used-car importers.

Existing laws actually allow investors in free ports to import used vehicles, but for use only within the special economic zone or free port. This provision has been much abused, with LTO and customs people processing the import papers and registration of the vehicles and allowing these to be taken out of the economic zones. It’s very difficult to understand why the government cannot keep the imported cars in the free ports. The issuance of a different set of plates (with a different color, for instance) could have easily addressed this.

To resolve this problem once and for all, President Aquino should issue a directive stating in very clear language a total ban on all imported used cars, no exception. After all, why should the country import used vehicles? (Indeed, why, if it isn’t big business for certain parties?) Many of these are inefficient in the use of expensive fuel—gas-guzzlers, in short—and are usually classified as junk in their countries of origin. Also, most of the imported second-hand vehicles, even if they look good and despite their luxury brands, are at the end of their life span or usability.