An Anguished Cry

It’s the type of press con most of us motoring journos would rather not attend. Absent from this one event held at the Makati Shangri-La last Wednesday was the usual pomp and pageantry that accompanies most new car launches.

But this was not a new-car launch. What it was is nothing short of an anguished cry from an industry brought to its knees not just by the double whammy of skyrocketing fuel prices and unfavorable exchange rates (not to mention the looming EVAT), but by the business-wrecking flip-flopping that has characterized much of the policies and actions of this administration.

I’m talking about what most people would probably think of as a dead issue that, unfortunately, seems to have resurrected — no thanks to some unseen actions by some probably questionable characters that, again unfortunately, have an incredibly profound impact not just on an industry, but on a whole nation as well.

I’m talking about the importation of used vehicles. Many are already aware of the questionable quality and safety of crudely converted automobiles. But what many are unaware of is just how damaging that business is not just to the local car industry but for the nation as well.

Which brings me back to the aforementioned press con. It was presided over by Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) President Elizabeth H. Lee and VP Mel Dizon with officers from the Motor Vehicle Parts Manufacturers Association of the Phils., the Phil. Automobile Dealers Association (PADA) and the Alliance of Industry Workers (AIWA).

Here now is the impassioned speech from the very articulate Ms. Elizabeth H. Lee:

We called this meeting to air our concerns regarding this never-ending issue of used vehicle importation. We are deeply disturbed by the recent revelations of Senator Richard Gordon that the issue of used motor vehicle importation was the subject of a political tradeoff, particularly in the Subic Freeport.

Senator Gordon has provided us a photocopy of a memo addressed to the President from the Chief Presidential Legal Counsel and the Senior Deputy Executive Secretary for Legal Affairs stating that, "the DOF, DTI, BOC, SBMA, LTO have all been directed by Executive Secretary Eduardo Ermita to comply with the Regional Trial Court Decision as affirmed by the Court of Appeals, allowing the importation and entry of used motor vehicles with the Subic Special Economic Zone, subject only to the payment of the required customs duties, until final disposition of the matter by the Supreme Court."

It appears that the legal opinion was crafted to facilitate a surrender of government’s announced policy to stop the illicit importation of used vehicles through Subic Freeport and other freeports. Rather than carrying on the effort to stop used vehicle importations, the Office of the President through this memo seems to be facilitating activities of the importers.

This action is inconsistent and runs contrary to the President’s lawful objective for the auto industry under EO 156 which includes the PROHIBITION OF IMPORTATION OF USED VEHICLES for the purpose of increased investments, government revenue generation, and increased employment for the labor sector, particularly the auto sector that numbers in excess of 77,000 workers. It is also inconsistent with her Excellency’s May 1 Labor Day speech, where she again reiterated her support for the automotive industry and called for the creation of a law that will strengthen the elimination of used vehicle importations.

While the question of the legality of the ban on used vehicle importation under EO156 is still pending before the Supreme Court, RA 8506 which strictly BANS the importation of Right Hand Drive (RHD) vehicles, is in full effect and must be strictly implemented to the fullest extent. SBMA has the right under its Charter to withhold issuance of import permits into SBMA of used vehicles. The government has more than enough legal and moral basis to fulfill the objective and clamp down on used imports, the overwhelmingly majority of which are RHD vehicles.

We are quite alarmed by the turn of events. We cannot emphasize enough that this action if true, sends a wrong signal to the investors on the manner by which government treats its own policies. It is not conducive to attracting investments and, in fact, erodes the confidence of the legitimate business sector. We support Sen. Gordon in his statements where he said "…these activities must not be allowed in Subic or anywhere else because they foster corruption, smuggling, tax evasion, to the great detriment of our economy."

We are the smallest market in the region, dwarfed by our ASEAN neighbors: Thailand with over 550,000 units sales, Malaysia with over 490,000, Indonesia with over 480,000 units. Their auto industries flourished due to a large extent, to the banning of used vehicle importation.

In 2004 the Philippine auto industry registered only 88,184 units of vehicle sales which is about half of the 1996 level of 162,000 units. Investments of over P68 billion pesos poured in over the years have put in place a production capacity of over 230,000 units for vehicle assembly alone… but capacity utilization stands at below 25%. A stark difference between formal industry sales of 88,000 units vs informal sales (read: used imports- MNDR) of 116,000 (based on 2004 registrations) shows that this problem is a major factor that stunts and continues to stunt the growth of the auto industry.

It is only in the Philippines where used importation flourishes in an environment where government regulation in terms of safety and environmental regulation and customs authority enforcement is at times absent or powerless and where such regulation can be viewed as being dictated by the importers themselves.

The charges made by Senator Gordon with reference to how the used motor importers brazenly continue to run over laws and authorities of the land, contravene government policy, and subvert an important domestic industry and the economy in general, should not be taken lightly. They continue to demonstrate that with the huge profits they can make out of their trade, combined with political clout, anything is possible in this country. They are as Senator Gordon has said, purveyors of a culture of corruption.

In the end, when the political dust settles, it is the businesses, the employers, the workers, the economy — ALL OF US left here in this country, that suffer. We seek your assistance in making right what is clearly wrong, and in making a stand to protect this country from those who care only for their self-interest.

End of speech. To all those who finished reading it and have recently visited our neighbors in Thailand, Malaysia or Indonesia and have wondered at their progress relative to the Asian economic crisis of 1997, wonder no more. It’s enough to make one’s blood boil.

It’s always fun to read Backseat Driver reactions. Here are some insightful observations from last week.

The opposition is urging our fellow countrymen to practice civil disobedience. Hey guys, you’re too late! We already have jaywalkers, PUV drivers that load and unload anywhere and kotong cops everywhere. — 09178459239 (Haha! You’ve got that right!)

To Mr. Dong Magsajo, great job with championing road safety! You’re right, people’s lives are far more important than politics. — 09178563068 (I’m glad you agree. Now if only our lawmakers would agree as well…)

To Mr. Dong Magsajo, regarding your message regarding safer roads: buhayin natin lahat ng sidewalks nationwide, kasama na ang private subdivisions. — 09063003716 (A sound suggestion, if ever there was one.)

"Reckless swerving" is the only milking cow of crook enforcers along EDSA. All motorists should watch out. — 09176299176 (Amen!)

I’m just wondering why you haven’t featured Benzes in your section. I notice that these cars have the best resale value. — 09175337998 (We do! In fact we featured the new SLK twice earlier this year.)

Speak out, be heard and keep those text messages coming in. To say your piece and become a "Backseat Driver", text PHILSTAR<space>FB<space> MOTORING<space>YOUR MESSAGE and send to 2333 if you’re a Globe or Touch Mobile subscriber or 334 if you’re a Smart or Talk ’n Text subscriber or 2840 if you’re a Sun Cellular subscriber. Please keep your messages down to a manageable 160 characters. You may send a series of comments using the same parameters.