Prohibition on importation of used vehicles sought

CEBU, Philippines - The Central Visayas Regional Development Council is asking the Office of the President and other government agencies to prohibit the importation of used motor vehicles.

During its full council meeting in Tagbilaran City yesterday, RDC also requested the Department of Trade and Industry (DTI) and the Bureau of Customs (BOC) to strictly enforce Executive Order 877-A and for the Land Transportation Office (LTO) not to register illegally-imported used motor vehicles.

The RDC Development Administration Committee recommended that the implementation of EO 877-A is the most realistic policy response to the issue of smuggled motor vehicles.

“The DAC considered EO 877-A as the appropriate government intervention that would yield the largest impact on the industry as well as the economy,” the committee said.

Data provided by the Cebu Auto Dealers Association (CADA) and the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) is among the basis of the recommendation.

Data showed that the number of second-hand or pre-owned vehicles that were registered for the first time reached at least 50,000 units per year from 2008 to 2010.

While these vehicles could come from several sources that may be exempt from the importation ban like those purchased by balikbayans or diplomats, the data also showed that majority of these units were second-hand motor vehicles imported through special economic zones. 

The automotive industry is seen as having the potential to contribute significantly to the Philippine economy because it is one of the sectors with the highest, if not the highest output multiplier.

Its multiplier of 2.42 means that a P1 increase in the sector’s output leads to an additional P2.42 increase in the output of other industries.

The Philippine Institute of Development Studies in its June 2011 Policy Notes noted the substantial decrease in the value added contribution of the automotive assembly industry fro approximately P72 billion in 2006 to around P18 billion in 2008.

Currently, the importation of second-hand vehicles is regulated under EO 877-A series of 2010, otherwise known as the Comprehensive Motor Vehicle Development Program.  

EO 877-A reiterated with modification the prohibition mandated by EO 156 series of 2002 of the importation of all types of used motor vehicles, parts and components at any point of entry, with the exception of those that may be allowed under certain conditions.

“The proliferation of imported used vehicles in the country indicates the laxity in the enforcement of EO 156,” the RDC DAC pointed out. (FREEMAN)