POSTSCRIPT / October 24, 2010 / Sunday


Philippine STAR Columnist

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Gov’t bias against used motor vehicles assailed

SUBIC BAY – Rows upon rows of used trucks, vans and heavy equipment sit under the sun in several yards in this former American naval base seemingly waiting for an uncertain death.

Unless given a reprieve, what used to be a bustling business of importing, reconditioning and selling second-hand trucks, utility vans and heavy equipment will die in the hands of the same government that derives billions in revenue and cashes in on the multiplier effect of cheaper vehicles boosting business and industry.

The resale of used vehicles, including right-hand-drive vans, shifted to low gear months before the May elections as many disillusioned importer-auctioneers thought it best to just wait till a new president who appreciates their business is elected.

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MIDNIGHT ORDER: The root of their disenchantment was Executive Order 887-A, described as another “midnight” action of then President Arroyo who signed it June 3, or less than four weeks before she was to step down.

Known as the Comprehensive Motor Vehicle Development Program, EO 887-A expanded EO 156 that bans importation of used vehicles, but allows trucks, special purpose vehicles such as fire trucks and ambulances, and heavy equipment.

The EO and the upcoming implementing rules and regulations (IRR) impose a total ban on imported used right-hand-drive trucks and vans. What the importers deplored as a restrictive program was made even tighter by the Arroyo administration.

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S.O.S. TO SENATE: The ban on imported used trucks and heavy equipment, including right-hand-drive vehicles, has prompted Subic locators to ask the Senate to help stop the killing of their business under EO 887-A.

Voicing the industry’s lament, United Auctioneers Inc. president Dominic Sytin wrote senators Ralph Recto (ways and means chair) and Manny Villar (economic affairs chair) to help save the jobs of some 120,000 workers about to be displaced.

In the House of Representatives, a joint committee headed by congressmen Jacinto Paras and Harry Angpin has acknowledged the contributions of cheaper used trucks to the government and the economy.

In a report after its public hearings, the committee said: “The importation of right-hand-drive andsecond-hand vehicles is not costing the government huge losses in revenues. Importation has caused the enormous increase of tax collections in Subic, has resulted in the sprouting of other big businesses, generating revenues through taxes and duties, and has created jobs for thousands of Filipinos.”

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CHEAPER OPTIONS: Sytin said that a brand-new Isuzu 10-wheeler dump truck could cost as much as P8 million, whereas a second-hand version could be bought for only P800,000 in an auction.

Considering depreciation and cost of money, he said, “this variance can drive up the hauling cost for one truckload of sand or lahar from Pampanga to Metro Manila from P2,500 to P25,000.”

He cited Segundo Duran Jr., who had used carabaos to transport seedlings. His buying a used 4×4 pick-up for P300,000 made the process faster and more efficient, helping him win the Model Tree Planter Award in Nueva Vizcaya and Palawan.

Sytin said: “Our used truck auctions allow businessmen to buy trucks and equipment of good quality at prices that are 5 to 10 times lower than those of brand-new units. If the importation of used right-hand-drive trucks is banned, and, given the very low disposable income of Filipinos, how can an ordinary construction firm afford a brand-new dump truck at P8 million? Or, how can a vegetable dealer from Baguio buy a new six-wheeler truck for not less than P850,000? Logically, to survive, he will pass on to consumers this transportation cost.”

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JAPAN FAVORED: With Christmas cheer still in the air last January, the government gifted local assemblers of Japanese trucks and big utility vans with a blanket zero-percent tariff, to the dismay of other dealers and assemblers whose products are made elsewhere such as in Korea, China and Europe.

So now it is not just importers and auctioneer of used trucks and big (more than 3-liter displacement) utility vehicles who are griping.

Other auto dealers selling vehicles that are not imported from Japan complain that while tariff is levied on their goods, cars from Japan enjoy zero tariff. They said this is unfair and discriminatory.

The killing of the business of importers and auctioneers of second-hand trucks and the crippling of local governments and small and medium enterprises (SMEs) using reconditioned trucks appear to have been the motive of EO 887-A.

Threatened auctioneers said the Department of Trade and Industry led the lobby for the ban under the EO and then rushed the IRR without consulting affected sectors.

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CHEAP & SAFE: Many SMEs depend on used vehicles that are cheaper and yet reliable. Without access to second-hand vehicles, they would be forced to buy more expensive brand-new units, raising operating costs that are then passed on to consumers.

Sytin said that 85-90 percent of trucks serving Metro Manila and the provinces were bought second-hand from Subic.

He added that more than 36 towns and 25 provinces rely on used earth-moving and construction equipment in paving roads and constructing buildings and drainage.

The United Auctioneers Inc. said they sell only vehicles still in good condition and complying with emission standards. As to safety, they cite police traffic records showing that 85 percent of accidents are caused by human error, not mechanical defects of vehicles.

Sytin expressed hope that the Aquino administration will be more supportive of their business that generates huge revenues, employs thousands of workers down the line, benefits the middle class and small/medium businesses, and help local governments in their projects.

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(First published in the Philippine STAR of October 24, 2010)

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