Support the Local Auto Industry

**True Faith** · December 8th, 2008 12:18 AM

SC asked to ban used car imports via Port Irene

12/06/2008 | 03:50 AM

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MANILA, Philippines - [SIZE=3]Former Solicitor General Francisco I. Chavez has asked the Supreme Court to ban the importation of used motor vehicles via Port Irene in Sta. Ana, Cagayan.[/SIZE]

Acting as a taxpayer, the lawyer said the high court should compel the Cagayan Economic Zone Authority (CEZA) to respect an earlier high court ruling upholding Executive Order 156. The EO, issued on Dec. 12, 2002, seeks to promote competitiveness in the local motor vehicle industry by prohibiting the importation of used vehicles.

Several parties have questioned the validity of the executive order. Highlighting the police powers of the President however, the high court in 2006 upheld the ban on the importation, except in Subic. The imported cars, however, should remain within the former US naval base area, it said.

Despite the SC order, Mr. Chavez said that CEZA continued to import used motor vehicles. Some 7,650 were brought into the country via the economic zone from June 2005 to May 2008. [SIZE=3]Senator Juan Ponce Enrile once defended the continuous operations at the port, noting that the high court does not have jurisdiction over the CEZA.[/SIZE]

Once the vehicles reach the ports, these are remodeled to conform to local automotive regulation standards.

"The clincher is that because of relaxed tariff and customs rules within the [economic zone], the vehicles, as modified, and even with a high mark-up placed by the local ’rebuilder,’ are sold at grossly lower prices compared to used motor vehicles sold outside the economic zone... to the [SIZE=3]detriment of the local motoring industry," Mr. Chavez said.[/SIZE]

Further, the Bureau of Customs (BoC), "either through its deliberate inaction, or refusal or inability to enforce EO 156, has facilitated the importation of said used motor vehicles and their eventual sale outside the bounds of CEZA," he said.

The Land Transportation Office also issues certificates of registration of the imported vehicles.

Besides the injunction, Mr. Chavez also asked the high court to compel the government agencies to enforce EO 156. - BusinessWorld

This is a good move from Atty. Chavez.

Finally, a private citizen doing something concrete to help our local auto industry.

This Port Irene should stop the illegal importation of vehicles.

Sen Enrile should stop defending the illegal trading of imported vehicles their because its a blatant conflict of interest. The third highest official of the land condoning illegal activities in the country

**leonleon** · December 8th, 2008 02:07 AM

Originally Posted by True Faith

This is a good move from Atty. Chavez.

Finally, a private citizen doing something concrete to help our local auto industry.

This Port Irene should stop the illegal importation of vehicles.

Sen Enrile should stop defending the illegal trading of imported vehicles their because its a blatant conflict of interest. The third highest official of the land condoning illegal activities in the country

Si Atty. Chavez matagal nang on the right side of the law ang taong yan, more often than not.

Si Enrile naman inaamag na sa tagal sa pag-nenegosyo sa gobyerno, and you're expecting him to change now? Umasa ka pa.... miracle na malaki iyon kung sakali.

**True Faith** · December 11th, 2008 09:11 AM

Originally Posted by leonleon

Si Atty. Chavez matagal nang on the right side of the law ang taong yan, more often than not.

Si Enrile naman inaamag na sa tagal sa pag-nenegosyo sa gobyerno, and you're expecting him to change now? Umasa ka pa.... miracle na malaki iyon kung sakali.

Enrile should have been included among the cars ordered destroyed by his patron, the sinless Ate Glue

:puke1:

Anyway, this smuggling of CBUs should be stopped-PERMANENTLY.

**Monseratto** · December 11th, 2008 06:52 PM

I think there is an ASEAN pact wherein taxes are fixed for CBUs produced among its members. If we tax CBUs higher from Thailand or Indonesia, their goverment might sue the Philippines. Or they may retaliate and increase taxes for CBUs coming from here... Alam ata ni Loren yan. Our country had tried unsucessfully to entice Auto Manufacturers here. Besides the Labour problem, the infrastructure in the country is rather antiquated and needs a lot of investment...

**ianmitsulancer** · December 11th, 2008 07:07 PM

Originally Posted by Monseratto

I think there is an ASEAN pact wherein taxes are fixed for CBUs produced among its members. If we tax CBUs higher from Thailand or Indonesia, their goverment might sue the Philippines. Or they may retaliate and increase taxes for CBUs coming from here... Alam ata ni Loren yan. Our country had tried unsucessfully to entice Auto Manufacturers here. Besides the Labour problem, the infrastructure in the country is rather antiquated and needs a lot of investment...

that is the AFTA. asean free trade area. click on the link to find out:

http://en.wikipedia.org/wiki/ASEAN_Free_Trade_Area

**jpdm** · December 14th, 2008 11:32 AM

..The government must impose non-tariff barriers in order to kill the striving illegal importation of vehicles through the free ports...

..this is to level the playing field...legitimate importers of vehicles spend millions of pesos in taxes...

..the government should do its homework.

**True Faith** · December 14th, 2008 07:10 PM

Agree jpdm...

It will be a big risk to re-impose high tariff rates but we can resort to other means...

The BOI should be creative about this to lure more domestic manufacturers and not mere importers and assemblers..

**jpdm** · December 24th, 2008 08:31 AM

I hope the government will finally come up with a study and a policy to protect the local industry from a regime of almost zero tariff (Free Trade)

**jpdm** · December 31st, 2008 12:47 PM

Originally Posted by jpdm

I hope the government will finally come up with a study and a policy to protect the local industry...

Unfortunately, our inutile and stupid government has practically not done anything.

This according to this study:

An international study has pointed to incompetent [SIZE=4]government policies as one of the major reasons why the local auto industry has been overtaken by neighboring Southeast Asian countries, particularly Thailand. [/SIZE]
The study traces the root of the problem of the auto industry to the [SIZE=3]poorly designed and poorly implemented social contracts. [/SIZE]

The ireport made by Ferdinand O. Maquito, a visiting researcher from the Japan-based Sekiguchi Global Research Association (SGRA), states that the problem in the auto industry can be solved by[SIZE=3] creating a special body that will closely monitor the performance of the sector and the amount of support given by the government. [/SIZE]

“There is no close coordination between the government and the industry,” Maquito said.

He says automotive companies prefer to invest in Thailand because the Thai government closely works with the industry. “Our research showed that the car companies in Thailand were always approached by the government.”

In the Philippines, meanwhile, Maquito says the government is only giving incentives to encourage investors to come in.

“Usually the government [SIZE=3]gives one-shot deals[/SIZE] but there is really no clear guidance from the government,” he notes.

[SIZE=3]Maquito points out they are studying how the government can give more perks to companies that are producing more cars in the country. [/SIZE]

Aside from giving more perks, he says frequent revision of programs by the government tend to confuse both potential and existing investors.
“The government keeps changing the rules in the middle of the game,” he says. “Worse, the industry players are not consulted every time there are changes.”

Still another reason why auto companies are reluctant to enter the Philippines is the country’s sensitivity to macroeconomic shocks such as political disruptions and the perceived instability of the government.

From Philippine Star
[SIZE=2]Yearender: Local auto industry's growth slows in 2008[/SIZE]
By Ma. Elisa P. Osorio
Updated December 31, 2008 12:00 AM

**CVT** · December 31st, 2008 01:10 PM

Aside from giving more perks, he says frequent revision of programs by the government tend to confuse both potential and existing investors.
“The government keeps changing the rules in the middle of the game,” he says. “Worse, the industry players are not consulted every time there are changes.”

Agree here. The policies change like the weather in our country. Say, like every 10minutes.

Look at Jan 2, being declared a holiday at the last minute. May be a bit off tangent or exaggerated on this. However, it gives us a perspective on the way our government conceptualizes and implements policies in a microcosm....

7202:bruce_lee: