BoI to review used car import policy

The Board of Investments will review Executive Order 156, which prohibits the importation of used motor vehicles into the country, amid the controversy surrounding the entry of second-hand units in Cagayan province via Port Irene.

Trade Secretary Peter Favila told reporters he was asked by Senator Juan Ponce Enrile to revisit the Malacañang directive to clarify whether or not Cagayan Freeport was exempt from the prohibition.

Enrile was implicated in the alleged rampant smuggling of used vehicles in his province of Cagayan.

The Bureau of Customs and Presidential Anti-Smuggling Group denied smuggling in the province, adding that the proper taxes were collected.

Executive Order 156, entitled “Providing for a Comprehensive Industrial Policy and Directions for the Motor Vehicle Development Program and its Implementing Guidelines,” bans the entry of imported used vehicles into Philippine customs territory.

The Supreme Court unanimously voided the inclusion of the Subic Bay Freeport Zone in the directive, which effectively limited the importation and resale of used vehicles within the Subic Bay Freeport.

The high court ruled with finality that used motor vehicles that come into Philippine territory via the secured fenced-in former Subic Naval Base area may be stored, used, or traded therein, or exported out of the Philippine territory, but they cannot be imported into the Philippine territory outside of the former American base.

“In particular, the senator wants a clarification on the provision of the directive that provides for the areas covered by the prohibition,” said Favila.

Cagayan Export Zone Authority has filed a case before the Regional Trial Court of Aparri, Cagayan, arguing that order did not apply to the ecozone.

Cagayan ecozone officials said the October 2007 final ruling of the Supreme Court upholding the constitutionality of EO 156 was not clear whether or not the directive applies to areas other than Subic Bay.

“It is a legal issue, but we will look into that,” said Favila.

Favila said while used motor vehicle imports were prohibited in the country, he also recognized the issue that many Filipinos could only afford to buy a second-hand vehicle.

“I have asked local vehicle assemblers to come up with an affordable people’s car so people won’t have to buy used vehicles that are cheaper,” said Favila.

While sales of new vehicles, as reported by the Chamber of Automotive Manufacturers of the Philippines Inc., continuing to post double-digit growth despite the harsh economic environment, the industry thinks it still needs to work on its competitiveness. By Elaine Ruzul S. Ramos - Manila Standard Today

BoI to overhaul incentive policy

By Elaine Ruzul S. Ramos - Manila Standard Today

The Board of Investments will overhaul the country’s incentive policy, including the granting of perks to micro small and medium enterprises and new investments.

“We’ll have universal incentives that don’t make exception whether you are an export- or domestic-oriented firm. Then, we’ll have additional incentives specific to export-oriented, for domestic and for MSMEs,” said Trade Undersecretary Elmer Hernandez.

The incentives board is drafting a bill that will amend Executive Order 226, or the Omnibus Investment Code, to address redundant incentives.

“It will be a major overhaul of the previous bill. This new bill would incorporate inputs from the previous bills in the Senate and the House as well as the study funded by the International Finance Corp.,” Hernandez said.

The new framework will also include the duration of incentives to be extended to new investments.

Hernandez said the amended framework would ensure that incentive policies on new investments would be the same everywhere, whether one is administered by the investments board itself, or the Philippine Economic Zone Authority, Subic Bay Metropolitan Authority, Clark Development Corp., or any other state-owned investment-promotion agency.

Hernandez said the investment priorities plan, under the amended code, would now be project-and activity-based.

He said the government would now be specific on which infrastructure project would be offered to investors.

President Gloria Macapagal Arroyo, in her State of the Nation Address last month, identified crucial projects aimed to sustain the development of her super-regions.

The grant of incentives in the manufacturing and services will be activity based, which means only certain sectors prioritized by government will entitled to perks.

The incentives on export-oriented enterprises will depend on whether they are inside economic zones or not.

“Existing incentives would still carry but we are looking at leveling the playing field for exporters, whether they are inside ecozones or outside. For example, we will try to match incentives granted by Peza to their locators, to those investments located outside ecozones,” Hernandez said.

MSMEs, meanwhile, will also have a separate set of incentives.