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SC ruling re ban on imported used vehicles is not final

09:47 PM February 24, 2013

Please allow me to respond to the Inquirer’s Feb. 19 editorial which tackled the importation and reconditioning of used vehicles at the Cagayan Special Economic Zone (CSEZ).

Although we believe we have already explained this matter sufficiently the past few days, allow us to iterate once more, that the very challenge to the constitutionality of Executive Order No. 156 has yet to be decided upon by a lower court. The Supreme Court’s recent ruling on EO 156, which imposes a total ban on the importation of used vehicles, only covers a petition for injunctive relief sought by the petitioner in the particular case, Forerunner Multi-Resources Inc.

Likewise, allow us to restate unequivocally, that the Supreme Court ruling is not yet final and executory and that it does not dwell on the merits of the main case still pending before the lower court. In the case of the importation of used vehicles by locators inside the CSEZ, Inquirer readers may want to know that the applicable executive order is EO 418 issued in 2005 and not EO 156 issued in 2002.


EO 418, which was declared constitutional by the high court in a decision that is already final and executory, affirmed the legality of the importation of used vehicles at the CSEZ. What was only declared unconstitutional by the Court insofar as EO 418 was concerned was its imposition of an additional tariff of P500,000 per unit on top of regular duties and taxes.

On another point, the editorial said: “The local car industry, which directly employs more than 70,000 workers in the assembly and autoparts 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 registration slumped to 40 percent; it sold only 88,075 units against the 129,425 units sold by used-car importers.”

We would not even attempt to question the veracity of the above-stated figures. We believe it is pointless to do so; as stated, those supposed figures are 11 years old. Hardly could those be reflective of the prevailing condition today.

The stark truth based on cold facts is that the yearly volume of units imported through the Cagayan Economic Zone Authority (Ceza) in 2012 was 5,428 units, or only about 3 percent of around 175,000 total brand-new units (sold by local assemblers) and brand-new completely built units (sold by importers under the Chamber of Automotive Manufacturers of the Philippines Inc. and the Association of Vehicle Importers and Distributors) within the same period.

Considering the reported phenomenal yearly growth in sales of brand-new vehicles in the Philippines amid worldwide recession, the notion that our business activity in the Ceza impedes the growth of the vehicle industry in the Philippines as a whole is completely absurd, and tends to stretch one’s mind to incredulity.

—JAIME C. VICENTE, president
Automotive Rebuilders Industry of Cagayan

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TAGS: automotive industry, Cagayan Special Economic Zone, CSEZ, letters to the editor, opinion, Supreme Court
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