Olongapo SubicBay BatangGapo Newscenter

Wednesday, October 08, 2008

Used cars registration in CEZ stopped

The registration of used imported cars brought into the country through the Cagayan Economic Zone (CEZ) has been suspended.

But the importation of second-hand vehicles into the CEZ can continue although these cannot be brought out of the zone, according to an official at the free port in Santa Ana, Cagayan.

CEZ administrator Jose Mari Ponce has issued a memorandum to its Port Irene office ordering the suspension of all applications for the registration of imported used vehicles, said Ralph Iloy, CEZ port operations specialist.

“We have received a memo that suspends or stops the processing [of documents] of those units that have not yet been processed by the [Land Transportation Office] or taxed by the [Bureau of Customs],” Iloy said.

However, car importation can still be allowed to continue because this was not covered by the order. He has yet to receive a copy of the Bureau of Customs directive.

“The order does not stop the importation, but only the registration of the units. Shipments may still arrive but the cars cannot be registered. Hence, they cannot be brought out of the free port,” Iloy said.

He said that the vehicles that arrived before the ban and whose import duties had been paid could still be registered, and those that had been registered could still be sold.

As of Tuesday, Iloy said about 2,000 imported used vehicles were parked at the 5-hectare CEZ car depot in Barangay Casambalangan in Santa Ana. Many of the vehicles were undergoing registration procedures.

Solgen announcement

The suspension order came on the heels of an announcement from the Office of the Solicitor General that declared that Executive Order No. 156 also covered the Cagayan Economic Zone Authority.

The executive order, issued by President Gloria Macapagal-Arroyo on Dec. 12, 2002, bans the importation of used cars for resale in the country.

The Solicitor General’s declaration also prompted Customs Commissioner Napoleon Morales last week to issue a directive banning the trade of used cars in the country.

Morales has been under fire for supposedly not implementing the ban on used vehicles, purportedly using as an excuse a pending suit on whether EO 156 was applicable to CEZ.

“With the Solgen’s final legal opinion, the customs cannot anymore hide under the cloak of pending legal matter,” Sen. Francis Escudero said yesterday.

Escudero, chair of the Senate ways and means committee, said CEZ was covered by the ban on importation of used cars. However, it can allow the entry of used cars as long as it is within the zone, he said.

Supreme Court ruling

The Supreme Court said in July that its ruling upholding EO 156 applied to Philippine territory outside the former Subic Naval Base.

Executive Secretary Eduardo Ermita had claimed that the ban on the importation of used cars only covered Subic.

The high court’s decision became final in November 2007.

At the height of the controversy over the used car import business in Cagayan province three months ago, Sen. Juan Ponce Enrile claimed that the Supreme Court was wrong in upholding EO 156, claiming that the directive of Ms Arroyo was unconstitutional.

Only Congress can ban the importation of used items, he argued.

Enrile made the statements in defense of the importation of used cars at Port Irene in the CEZ in his home province of Cagayan. The CEZ is a free port that was created through the initiative of Enrile.


In an internal draft report, the American Chamber of Commerce (Amcham) has claimed that the used car import business in the CEZ is “illegal and contrary” to EO 156.

Based on a report of its visit to Port Irene in May, Amcham’s Investment Climate Improvement Project said the CEZ had already imported 8,000 vehicles in 34 months or an average of 225 a month, most of which were sold in the Philippines in violation of EO 156.

Amcham claims that the CEZ has displaced the Subic Bay Freeport as the country’s entry point for imported second-hand luxury vehicles, undermining the business of car assemblers in the country.

Follow rule of law

Peter Geroue, president and chief executive officer of Apollo International Trading Corp., the biggest dealer of imported used cars in the CEZ, said importers “will just have to follow the rule of law.”

Geroue earlier slammed accusations that the thriving used car industry in the CEZ was being used as a front for smuggling of luxury vehicles into the country. With a report from Michael Lim Ubac - By Melvin Gascon - Inquirer Northern Luzon Bureau

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