Goods cannot be released without official knowledge

SUBIC BAY FREEPORT -- What is the extent of car smuggling at the free port? Who are the smugglers and the government officials they are allegedly conspiring with?

These questions came up after three backhoes destroyed 18 cars here on Aug. 16 in a nationally televised show of resolve to stop the smuggling of cars that has deprived the nation of billions of pesos in tax revenues.

Retired Lt. Gen. Jose Calimlim, senior deputy administrator for operations at the Subic Bay Metropolitan Authority (SBMA), estimates that out of the 60,000 cars and heavy equipment imported yearly through the free port, 3,000 are without import permits.

A car “importer,” who admits participating in smuggling activities at the free port since 2001, has put the “loose” cars at 3,000 to 5,000 a year. He says only “token” seizures were being conducted by the SBMA and the Bureau of Customs.

Calimlim, chief of Task Force Subic that was created by President Gloria Macapagal-Arroyo to stop car smuggling through the sprawling former American naval base, says he is having a tough time.

His own report reflects this.

Over a one-year period following his appointment in 2004, Calimlim had seized only 36 vehicles. He confesses he could not pinpoint who the culprits are and if he knew he could not reveal their names anyway because “threats on my life are terrible.”

Marietta Zamoranos, Bureau of Customs collector at Subic, also cannot give names, although critics say it is quite easy to track down smuggled cars because there is a paper trail. Cars are registered with the Land Transportation Office.

“Their schemes are hi-tech,” Zamoranos says. Pressed what she means by that, she says: “People in the know would not know. They have changed gears.”

Undersecretary Antonio Villar Jr., chief of the newly formed Presidential Anti-Smuggling Group, is said to have a watch list of smugglers, which he would not disclose.

Jesus Arranza, president of the Federation of Philippine Industries and chair of the FPI’s anti-smuggling committee, says: “I cannot tell you who are actually smuggling in the cars. It’s difficult to substantiate. But the goods cannot come out without the connivance of people in authority.”

SBMA Administrator Armand Arreza offers an explanation on why no suspects or a few suspects have cropped up.

“In the majority of smuggling cases, there is an absence of admission permits and gate passes. This practice is commonly referred to as ‘swing.’ Smuggled goods typically have no documentary trail. We are trying to identify the individuals who are involved in ‘swing’ activities and will persecute them fully,” Arreza said.

At least 35 Subic-registered companies engaged in importing vehicles had been delisted for “possible import-export violations,” not necessarily smuggling.

Possible suspects

The car smuggler identified two possible suspects.

The first is Pampanga-based and is a relative of a man killed last year over what was believed to be a conflict among car smugglers at the free port. His activities were the subject of an Aug. 31, 1999, confidential memorandum by an SBMA security consultant.

That man was described in the memo as a “notorious broker.” His name does not appear in available apprehension reports or in lists of consignees.

The second is said to be close to Customs Commissioner Napoleon Morales.

“I don’t know him,” Morales said when the Inquirer mentioned the man’s name to him.

The man was not available for interview as he was reportedly in Taiwan. His name appeared twice in the summary of 264 cars imported from June 1997 to August 1998.

Unsettled issue

The smuggling issue has hounded the Subic Freeport since 1993, in the time of SBMA’s first chair and now Sen. Richard Gordon.

His successor, former Bataan Rep. Felicito Payumo, had constantly raised the issue, saying smugglers used Subic’s Freeport status (the policy of free flow of goods) to bring in tax-free imported cars. Gordon has denied that smuggling happened under his stint.

When Payumo took over the helm of the SBMA, it was Gordon who questioned the smuggling activities, this time on used and right-hand drive cars.

In a Sept. 30, 2005, hearing by the Senate committees on government corporations and public enterprises, Gordon said that out of 90,000 smuggled cars that passed through the free port from 2000 to 2003, only 128 were re-exported abroad.

At a tax of P100,000 per vehicle, he says government might have lost P45 billion in taxes for the same period.

Subic auctioneers and assemblers have shrugged off Gordon’s allegations, saying the importation gave birth to an industry that provided Filipinos with affordable cars.

They mounted a lobby up to the Supreme Court to junk Ms Arroyo’s Executive Order No. 156 that banned car importation through the Subic Freeport. They won.

Issue won’t die down

The smuggling issue, spanning three presidents and four SBMA administrations, has refused to die down.

For one, there has been a rise in the importation of luxury vehicles by Subic-based trading firms.

From a low of nine units in the first three months of 2006, the number rose to 272 in the succeeding three quarters of the year. From January to February 2007 alone, 89 cars have entered the free port.

“Ford, Toyota, Nissan and other big capital investors are all relocating to other countries because they are losing money from technical smuggling. They told [Ms Arroyo that] if no measures are taken, they would most likely resort to massive layoffs,” says an Inquirer source in Malacañang to explain the destruction of 18 cars on Aug. 16.