A car smuggler’s tale

(Inquirer Editor’s Note: The following is how a car smuggler views the smuggling of cars inside the Subic Bay Freeport. The source, who requested anonymity, has been in car trading since 1965, starting in Manila before moving to Cebu. He began smuggling cars out of the Subic Bay Freeport in 2001.)

MANILA, Philippines -- The smuggling of cars via the Subic Bay Freeport is a lucrative business. We in the gray market (without any dealership’s permit) sell cars 30-40 percent cheaper. We do not pay the blue book value (versus the transaction value).

If you’re a free port resident, you can import cars under your name or use dummies, like your housemaid. You can import if you are a registered locator even if you are not in car trading, or you can avail yourself of port user’s right.

You have to talk to only a few Bureau of Customs (BOC) people.

Dealers in the gray market do not sell to legitimate outlets.

There is poor coordination between Subic Bay Metropolitan Authority (SBMA) and the BOC. We can bypass getting import permits. We can enter and exit our cars via the Port of Subic and then pay taxes in Cebu City.

Car smuggling is worse in Cebu. Monthly, 5,000 cars are smuggled there; at Subic, 3,000 to 5,000 units.

Another style is to pay for the engine and chassis and pretend that you are a licensed assembler even if a car is brought in whole. The license plates can be secured either from the Land Transportation Office in Toledo City or in Diliman, Quezon City.

SBMA and BOC officials know all this. The SBMA has a bigger area because it covers the free port. Customs does not check warehouses.

Profit comes from not paying the government the right taxes.

I pity the government because grease money is bigger than the income government derives from this. Bribes at BOC are between P500,000 and P600,000 per car. The highest tax is between P100,000 and P200,000.