Are used-vehicle imports good or bad?

Importers of used vehicles at Port Irene and the chief of the Manila Police District (MPD) were at the Kapihan sa Manila at the Diamond Hotel last Monday to air their sides on recent controversies hounding them, the vehicle importers on the alleged smuggling of used vehicles in the Cagayan Special Economic Zone and Freeport (CSEZF), and the MPD on the arrest of Vice Mayor Isko Moreno and his supporters for holding an alleged prohibited bingo game in Manila. Jaime Vicente, president of the Automotive Rebuilding Industries in Cagayan Valley, was accompanied by lawyer Kate Modesto, while MPD chief Alejandro Gutierrez was accompanied by the MPD legal officer, Maj. Dennis Wagas.

The crux of the vehicle importers’ arguments hinges on five issues:

1. That there is no car smuggling in Port Irene because all the vehicles are documented, are processed by the Bureau of Customs, with duties and taxes duly paid, and the vehicles registered with the Land Transportation Office. They boast that the BOC collects P300 million a year in duties for the vehicles.

2. That there is no car manufacturing industry that the used-vehicle market is allegedly killing. Citing 2012 figures, they said Thailand manufactured 2,453,717 vehicles, followed by Indonesia with 1,065,557, and Malaysia with 509,620. In the same year, the Philippines “manufactured” (the correct term is “assembled”) a measly 75,413 vehicles which represented only 1.78 percent of Asean’s total output. So what jobs from local car “manufacturers” are being threatened by the CSEZF imports? they ask. On the contrary, they say, it is the jobs of thousands of workers in the automotive rebuilding industry that would be threatened if used-vehicle importation is banned, plus the loss of P300 million in duties to the government each year.

3. That the Chamber of Automotive Manufacturers of the Philippines also relies on the importation of brand-new vehicles to augment the measly local production, while the Association of Vehicle Importers and Dealers imports all the vehicles it sells, mainly from Hyundai.

4. That Executive Order No. 156, which bans the importation of used vehicles, has been superseded by EO 418 which now allows it.

5. That the importation of cheap used vehicles helps poor entrepreneurs and other Filipinos who cannot afford the very expensive brand-new vehicles that auto manufacturers are selling.

My comments:

1. There may be no outright car smuggling but there may be technical car smuggling. Even if the vehicles are processed and duties paid, there is still technical smuggling if the law, such as EO 156 that prohibits it, is violated.

2. The figures are correct but they show, precisely, that the Philippine automotive industry is very sick and that competition from used-vehicle imports may finally kill it. Whether the automotive industry is allowed to die or the auto rebuilding industry is killed, the effect is the same: Jobs will be lost. The important thing is that the law should not be violated.

3. True. No comment needed.

4. EO 156 clearly and unconditionally bans the importation of used vehicles. This has been affirmed by the Supreme Court. EO 418 does not say that importation is allowed. That is only the conclusion of the importers because it increases the duties on vehicle imports. Why would the EO increase duties if importation is not allowed? they say.

But the legal principle is that between two laws, one of which is clear and the other is not, the clear one should be paramount.

5. If the importation of used vehicles is for poor Filipinos, why the many  luxury cars such as Porsches, Lamborghinis, BMWs, and Ferraris?  These examples of conspicuous consumption have no place in a poor country like ours. Of what use are these luxury vehicles in the Philippines where you cannot drive fast because of the heavy traffic in the urban areas and the rough roads in the rural areas?

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On the affair involving Isko Moreno and the bingo game, General Gutierrez and Major Wagas said bingo without a permit from City Hall is clearly prohibited. The bingo games held in shopping malls have permits, they said. Those held at home are allowed, but those held in public places, such as on sidewalks and streets during wakes, are now prohibited.

They added that corpses are being used by gambling operators to circumvent the law against gambling. Operators rent corpses for weeks and months so that gambling such as “sakla” and “monte” and yes, bingo, can be held during the wake.

Asked who had ordered them to raid the bingo game where the vice mayor was arrested, the police officers said nobody had to order them. They said there were complaints from residents in the area because the bingo game was hindering traffic.

“When there is a complaint, we have to act,” said Gutierrez.

When asked if Mayor Alfredo Lim had ordered them to raid the bingo game because it was being held by his political opponents to court votes, they said no, nobody had to order them.

When asked if policemen had been told to watch the film bio “Alfredo Lim”—with actor Cesar Montano playing “Dirty Harry”—because it is about police work, the two officers said they had neither been ordered nor invited to watch it but that they would buy tickets and watch it, anyway.

Asked what had happened to the cases against Moreno et al., they replied that those charged are under preliminary investigation by the Department of Justice.

What about the cases filed with the Ombudsman against the police raiders?

“We are providing lawyers for the accused policemen.”

Who do they think will win in the mayoralty election in Manila?

“Lim!”