RP's version of cash-for-clunkers won't work

Manila Mayor Alfredo Lim has once more showed us that he is a no nonsense mayor. A month ago he gave all the vendors selling pirated video discs in Manila a one month grace period before he would crack down on this illicit business so they could sell whatever stocks that they have left and have a chance to shift into a legal business. Mayor Lim was obviously disturbed by the reports that Manila was one of the most notorious places selling pirated CDs/DvDs, but in fairness to Manila, it is not alone, Metro Cebu too and many other cities are notorious for selling pirated video films.

Exactly a month from that promise, on July 1 Mayor Lim together with Optical Media Board Chairman Ronnie Ricketts including representatives from the US Embassy personally led a Manila Police team and confiscated some P10 million worth of pirated discs in Manila’s Quiapo district. Of course, Mayor Lim had to do this because of the intense pressure from the United States were three American industry groups have urged the US Government to keep the Philippines on the watch list of countries notorious for violating patents and copyrights.

The International Intellectual Property Alliance (IIPA) reported a loss last year of $126 million which is up by four percent from the 2008 figures. Legitimate companies lost $112 million to pirated music records which is also up from previous years. I have always believed that the Philippines should not be taken out of the watch list until we don’t see pirated films sold openly in many cities in this country. Let’s hope they will raid more cities.

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I couldn’t help but notice that report on last Sunday’s The Philippine STAR where Sen. Miriam Defensor Santiago recently filed a bill calling for a phaseout of old and fuel inefficient vehicles by issuing the owners cash vouchers to be used as partial payment for the purchase of new or used fuel-efficient vehicles. If this idiotic law is passed by the Senate, it means that I would have to get rid of my 2006 Honda Civic, which in my book is the most fuel efficient vehicle I have ever owned. If you ask me using the year model as her basis for the phaseout is totally wrong and it would be a huge economic burden to the middle class and even the emerging middle class who were once in the poverty level and is slowly moving up towards the middle class.

I know exactly where Maid Miriam got this idea, from the United States Transportation Department’s “Cash for Clunkers” program, which was designed to boost the sales of ailing General Motors (GM) which was recently bailed out by the US Government. Call it timely that aside from resuscitating the ailing GM at the worse financial woes happening in the United States, it was also then that Americans had to pay top dollar for a gallon of fuel, hence the Cash for Clunkers (C4C) was designed for Americans to rid themselves of those so called gas guzzlers through this incentive program.

The C4C was a $3 billion plan, which the Obama Administration hailed as a huge success. Those who availed of this program would surrender their gas guzzlers to a nearby auto dealer and avail of a trade-in value of $4,500 on the purchase for a new vehicle. While I submit it helped those auto dealers a lot during the time of the US recession, however it is not really an all-out success as some pundits reported.

First of all, it was an administrative fiasco as too few government people were assigned to the thousands of participating dealers. Secondly, those who participated in this program caught many car dealers unprepared because Uncle Sam has not yet remitted the money to these dealers. Hence they ended up giving advances to the numerous buyers. Todate, many car dealers are still waiting to get their refunds from the US government.

There are certainly realities that our Senators ought to consider before copying this program here in the Philippines. First of all, most car owners in the Philippines change cars at an average of between six to ten years, while in the US, car owners before the recession hit America would change cars once every three years. In the Philippines, because of our close knit family unit, when a father buys a brand new car and in five years, gets a new one for himself, chances are, one of his kids would get the old car. Why buy a second hand when Daddy is buying a new car?

Then in ten years, when this car is starts to get old, the chance of it being sold to another owner is high because there is a huge market for second or third hand vehicles. Finally, there is the problem of identifying how much would the Philippine government give out to those buyers who are forced to sell their car because it is already over the prescribed age to be phased out? So I suggest that Maid Miriam tread on this like walking on glass!

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For e-mail responses to this article, write to [email protected] or vsbobita@ gmail.com. His columns can be accessed through www.philstar.com.