Officials clarified the order is in compliance with the ruling of the Olongapo City regional trial court and the Court of Appeals allowing the importation and entry of used motor vehicles within the Subic Special Economic Zone.
The order, however, caused the players of the automotive industry to express their concern amid allegations that the lifting of the ban was in exchange for Alliance of Volunteer Educators Rep. Eulogio "Amang" Magsaysay’s withdrawal of support for the impeachment complaint against President Arroyo in the House of Representatives.
Malacañang said it could not stop the importation but imposed a P500,000 tariff as a "safety net" for every secondhand vehicle brought into the country.
Executive Secretary Eduardo Ermita said the Office of the Solicitor General had elevated the case before the Supreme Court to decide on the legality of Executive Order No. 156 signed by President Arroyo banning the importation of secondhand cars.
Chief Presidential Legal Counsel Merceditas Gutierrez called The STAR last night to clarify that the memo sent to the President and dated Sept. 8 was an "internal" one, and that this was not meant as a directive for any government agency to implement.
"It is a study, an opinion made by us, and it’s up to the President what course of action she will take," Gutierrez said.
"If we were wrong, it would be overturned. But so far, the President has not taken any action yet on that memorandum."
One unanswered question is how this "internal" memo ended up in the hands of the media.
Gutierrez and Senior Deputy Executive Secretary for Legal Affairs Joe Nathan Tenefrancia stated a supposed order from Ermita directing the Department of Finance (DOF), the Department of Trade and Industry (DTI), Subic Bay Metropolitan Authority (SBMA) and the Land Transportation Office (LTO) to comply with the court rulings and allow the importation of secondhand vehicles within the Subic Special Economic Zone.
The importation can be allowed upon payment of the "required customs duties" until otherwise ordered by the Supreme Court, it said.
Gutierrez and Tenefrancia issued the memorandum pointing out the government’s appeal before the Supreme Court could not stay the earlier ruling made by the lower courts declaring EO 156 as unconstitutional and restrictive of free trade.
The said executive order was issued in December 2002 with another EO issued last April, imposing the P500,000 tariff to counter the effect of the court ruling on the local automotive industry.
Last May, President Arroyo said she would ask Congress to pass enabling legislation to permanently put an end to the importation of secondhand vehicles.
Mrs. Arroyo stressed the legislation is necessary to protect the local automotive industry from unfair competition.
Automotive industry players appealed to Mrs. Arroyo to stop the importation of secondhand vehicles to protect the local industry.
The Olongapo court, in its March 10, 2004 decision, held that EO No. 156 was unfair to the other traders engaged in the importation of secondhand cars, as well as consumers who could not afford brand-new vehicles.
On Feb. 14, 2005, the Court of Appeals upheld the lower court’s decision, denying the government’s appeal.
Sen. Richard Gordon, a former SMBA chairman, claimed the lifting of the ban was in exchange for the Magsaysays’ support of the President during the impeachment vote in the House.
Among those who voted against the impeachment complaint was Zambales Rep. Ma. Milagros "Mitos" Magsaysay.
The Magsaysays denied any deal with the President over lifting the ban, stressing they are not even engaged in the automotive business.
Ermita, for his part, clarified there is no new order to rescind EO No. 156.
He claimed to have never seen the memorandum mentioned by Gutierrez on the lifting of the ban.
"I should know because all these have to pass by me before they are signed by the President," Ermita said.
Ermita claimed he had inquired about the implications of the court decisions on EO No. 156 but clarified that he never issued another executive order as a substitute.
Ermita stressed he never recommended the importation of secondhand cars into the country in the first place.
He said he was not given any instructions to reconcile differences with Gordon.
"We need to reach out to him. But if I were the senator, I would first verify. The core of the issue is: is there an EO to rescind EO No. 156? I am saying none. So that’s the core of the issue," Ermita said.
Ermita claimed he was not privy to plans by Mrs. Arroyo to appoint a Magsaysay to replace resigned SBMA chairman Francisco Licuanan III.