Group seeks ban on 2nd hand vehicle imports

MANILA, Philippines - Multi-sectoral group Fair Trade Alliance (FTA) is calling for a ban on the importation of second hand vehicles.

In a statement, Fair Trade advocates, including several major labor organizations, reiterated their strong opposition to the importation of second hand vehicles.

They expressed full support for the passage of proposed House Bill No. 5279, (an Act Establishing the Comporehensive Motor Vehicle Development Act) which is now being deliberated by the House Committee on Trade and Industry.

The bill lays down wide-ranging incentives for the automotive manufacturing industry, including the provision of “demand side” incentives, such as exploring the possibility of setting up affordable and accessible financing schemes to allow even low-income families to afford vehicles for business, commercial or personal use.

HB 5279 prohibits the importation of second hand vehicles, except for certain kinds of motor vehicles used for special purposes, such as fire trucks, ambulances, funeral coaches, crane lorries, among others.

The House Committee on Trade and Industry, during its most recent deliberations ordered that HB 5279 be consolidated with other pending related bills, including HB 4499 authored by Congressmen Rufus Rodriguez and Maximo Rodriguez Jr. and HB 1517.

The FTA stressed that the consolidation of the bills should retain the provisions of HB 5279 that prohibits the entry and importation of second hand vehicles. House Bills 4499 and 1517 has no such prohibition.

In a letter to Congressman Albert Garcia, chair of the Committee on trade and industry, four labor federations affiliated with FTA said “the entry of second hand vehicles cause the sales of locally produced vehicles to decrease,” resulting in decreased production and fewer workers.

The group also raised environmental and safety concerns and the possibility of smuggling if second hand vehicles are allowed to enter the country.

FTA said the exclusion of the prohibition of imported second hand vehicles in the consolidated bill will totally negate whatever development incentives are being made available through the bills.

At present, Executive Order 156 issued by the previous administration bans the importation of second hand vehicles, but the implementation of the EO has largely been lax, as second hand and right-hand drive vehicles are still being smuggled into the country.

There was an attempt to railroad implementation of EO 156 with EO 877-A which deleted the provision on the prohibition of imported second hand vehicles but the government backtracked on EO 877-A.     

FTA argued that the ban on the importation of secondhand vehicles will not deprive vehicle ownership to those who cannot afford brand new vehicles. 

The group said there are enough locally-manufactured secondhand vehicles available in the market, with various financing schemes from local banks.

With over P100 billion in investments, the local automotive industry employs about 74,000 workers, which decreased as compared to the 77,000 workers in 2004. 

The industry has generated about $2 billion in export revenues, and contributes about P325 million yearly to the government in withholding taxes from its workers and assemblers.