Second-hand vehicles can be imported only through Subic freeport SC

MANILA, Philippines – Second-hand vehicles can only be imported through the Subic Bay Freeport Zone, the Supreme Court has stressed.

But Cagayan Economic Zone Authority (CEZA) administrator Jose Mari Ponce stressed that the importation of used cars in Port Irene in Santa Ana, Cagayan is not covered by Executive Order No. 156, banning its importation in the country.

Court spokesman Midas Marquez cited the Court’s 26-page decision penned on Feb. 20, 2006 by Justice Consuelo Ynares-Santiago that voided the inclusion of the Subic Bay Freeport Zone in Article 2, Section 3.1 of EO 156, prohibiting the importation of used motor vehicles into the country.

“Based on the decision, it is only permitted in Subic,” Marquez said.

The Court ruled that used motor vehicles coming into the Philippine territory via the secured fenced-in former Subic Naval Base area may be stored, used, or traded or exported out of the Philippine territory, but they cannot be imported into the Philippine territory outside of the secured fenced-in former Subic Naval Base area.

The Court said EO 156 ran afoul of two of the requisites of a valid administrative order – that it is issued within the scope of authority given by the legislature and that it is reasonable.

The Court said it found no logic in the all-encompassing application of the assailed provision to the Freeport, which is outside the customs territory.

The Court noted that RA 7227’s Implementing Rules and Regulations specifically defines the territory comprising the Subic Bay Freeport as “a separate customs territory consisting of the City of Olongapo and the Municipality of Subic, Province of Zambales, the lands occupied by the Subic Naval Base and its contiguous extensions, among others.”

RA 7227 allows the free flow of goods and capital within the Freeport in order to attract investors to invest their capital in a business climate with the least government intervention.

The High Court also held that EO 156 satisfied the first requisite of a valid administrative order, and as such, has constitutional and statutory bases.

In a fighting mood

However, Sen. Juan Ponce Enrile earlier said that the Supreme Court erred in upholding EO 156, claiming that the directive of President Arroyo was unconstitutional.

He said it is only Congress that can ban the importation of used items.

Marquez said that while the Court respects the senator’s view, the Court’s decision has long become final and has already formed part of the law of the land.

“The considered view of the good senator is respected. However, the SC decision has long become final. It forms part of the law of the land, unless later revoked or amended,” he said.

Enrile came to the defense of the CEZA and vowed to support the importers in any court battle with those who want to stop the importation and re-sale of second-hand cars in the freeport.

He even dared critics to sue him or the CEZA officials to settle the issue once and for all.

“Anybody who wants to try to file a case, we will welcome them. If they want to file, anybody who wants to file, we will welcome them, we will provide them with hotels in Cagayan,” Enrile said.

He said he did not mind his colleagues opposing his position that EO156 did not cover CEZA but only Subic Bay Freeport Zone.

“I agree to that proposition but you have to bear in mind that the CEZA started operating only in June 2005 and the case was pending in the Supreme Court and CEZA is not within the jurisdiction of the SC. The SC does not acquire jurisdiction over CEZA, it acquired jurisdiction over Subic and there was EO 418 that implicitly allows the importation of used cars, only you have to pay a higher tax. So there was no reason for the Bureau of Customs, in my personal opinion, to enforce that decision of SC,” Enrile said.

CEZA administrator Ponce said they are now considering other business opportunities in the Freeport just in case the court would eventually affirm that it is covered by the EO. – Perseus Echeminada, Charlie Lagasca, Aurea Calica, Christina Mendez