Behind our backs

While the Aquino administration is busy exorcising “Midnight appointees”, many small and medium businesses are hoping and praying that President Noynoy Aquino would also put the freeze on “Midnight EOs” or Midnight Executive Orders designed to give Arroyo supporters and special interest groups an unfair advantage.

If the new administration has good reason to be concerned about “midnight appointments”, then President Aquino ought to appreciate how Midnight EOs can ruin business and progress in the country. 

In the Philippines, it has been a common practice that while everyone is busy with the elections and the subsequent change of administration, certain interest groups, lobbyists, and businessmen known to be contributors take advantage of the transition and sneak through what we now call “Midnight EOs”.

These Midnight EOs are either to award something, or reward someone.

No one pays much attention to these Midnight EOs because they remain “suggestive”, until or after the concerned government office decides to formulate the IRR or implementing rules and regulations for a certain Executive Order.

As far as lobbyists and interest groups are concerned, the most vital instrument is the EO because it is usually the hardest to get except when there is a new President paying off political debts or when a President is on the way out and couldn’t careless about the consequences of a “Midnight Executive Order”.

Unfortunately, the incoming administration is the one who discovers the landmine only after there is a public outcry or when the government has to pay for someone else’s debt or abuse.

 Once the “Midnight EOs” are in place, all the lobbyists or special interest groups have to do is “influence” the crafting of the implementing rules and regulations. The more discreet individuals merely inject or insert a specific term or word. One term or word can greatly determine how the EO is applied and to whose advantage.

Those terms are usually; “exclusively”, “only”, “experienced”, “established”, “balanced” or something about capacity or capability.

To better understand this, lets study one such EO that observers suspect was the handiwork of a group who has consistently given campaign contributions to all administrations in Malacanang. As a result the group has directly participated and benefitted in government purchases and contracts involving trucks and specialized equipment.

The suspected “Midnight EO” is Executive Order No. 877-A entitled: The Comprehensive Motor Vehicle Development Program.

Just to make a point, this I believe, is the fifth and certainly won’t be the last EO on the matter. It started with Ferdinand Marcos and has been reintroduced in every administration.

In reality EO 877-A spells out its intent to PROHIBIT OR BAN the importation of used vehicles. So once again they want to push another President Aquino into the same situation as they did to President Cory Aquino. Back in the ’80s they prevailed upon Cory to ban the importation of used vehicles such as trucks.

A few months later, the country experienced a serious commercial transport shortage. Tita Cory had to recall her order and issue two new ones that once again allowed the importation of used vehicles. Midnight EO 877-A will be good for the interest of a few people who want to have a monopoly of the commercial truck sector, but will deprive thousands of Filipino businessmen free choice.    

Midnight EO 877-A wants to enhance privileges and tax reductions for the vehicle industry.

But who exactly is the “industry”? If you research how the Department of Trade and the Department of Transportation and Communication defines members of the industry and the qualifications required, you will discover that none of the small scale businesses qualify or are authorized. Only big foreign manufacturers and their local partners are qualified. This happened when lobbyists managed to inject their interests and influence into government policies.

Midnight EO 877-A pushes for the creation of a Motor Vehicle Industry Development Council. Presumably, the council will dictate on the entire life and rules of motor vehicles in the Philippines and you can guess who will be the only members of the said council!

What got my attention in Midnight EO was the following:

“The production and/or assembly of motor vehicles and other vehicle assemblies covered under the MVDP shall be knocked-down (KD) condition”.

Translation: only cars made from overseas facilities or manufacturing plants of foreign firms can be used. So no small scale, made in the Philippines, handmade by Pinoys type of assemblers will be allowed!

“Only brand-new Original Equipment Manufacturer (OEM) of KD parts and components for assembly purposes shall be eligible for importation under the MVDP”.

Translation: once this Midnight EO passes into law, you can kiss “surplus engines, surplus parts and any other OEM surplus importation goodbye.” If your car, truck or van conks out, you can only buy brand new parts.

The problem is if the MVDP people have their way, they will only allow the sale and supply of parts for cars not older than five years old. So ultimately the real goal is to “phase out parts, phase out old cars” and sell everybody a new one.

It may be a blessing in the sense that we might all follow the way of China and Vietnam where people have shifted to bicycles and scooters.

But what about the business sector?

The people behind “Midnight EO 877-A” want to phase out the importation of ALL used trucks from Japan. To pull this off they try to make it politically correct by saying ban right-hand trucks. They think we don’t know that ALL vehicles in Japan are right-hand drive, except for foreign imports.

In the end, “Midnight EO 877-A” will bring windfall profits to a very small group but it will be at the risk and the expense of thousands of businessmen, local government development projects and the national economy.

The Aquino administration should learn from history. There is nothing better than competition and a free market. P-Noy should also investigate how and where special interest has corrupted government agencies and policies in order to kill free enterprise.