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HILLTOP VIEW of the five-hectare car importers yard in the Cagayan Economic Zone and Freeport in Casambalangan village in Santa Ana, Cagayan, used by eight used-car dealers catering to customers from all over northern Luzon. MELVIN GASCON/INQUIRER NORTHERN LUZON


Prove charges, Cagayan car dealers dare Amcham

By Melvin Gascon
Philippine Daily Inquirer
First Posted 01:33:00 07/26/2008

Filed Under: Smuggling, Crime, Automotive Equipment

SANTA ANA, Cagayan, Philippines ? The car dealers at the center of a brewing smuggling controversy have challenged the American Chamber of Commerce of the Philippines, commonly called Amcham, to produce solid evidence to prove its allegations that the used car business at the Cagayan Economic Zone at Port Irene was being used as front for smuggling activities.

Peter Geroue, president and chief executive officer of Apollo International Trading Corp., said the charges were ?unfair? and that Amcham was making accusations based on mere hearsay.

?I challenge the Americans that if they can prove that any single unit of those cars there [in the car lot] was smuggled, I will give to them my company for free,? he said.

He expressed dismay that the Amcham report likened the car importation business here to that of the Subic Bay Freeport, which the Supreme Court has ordered stopped.

Not like Subic

?I acknowledge that in Subic, it [the car importation] was too much, because there were about 3,000 cars for every shipment that arrives. But what we have in Cagayan is only about 300 per shipment, which is incomparable,? Geroue said.

According to a report of an Amcham team that visited the Cagayan Economic Zone (CEZ) in this coastal town last May, the CEZ had replaced the Subic Freeport as the entry point for imported second-hand luxury vehicles for resale, in violation of a Supreme Court ruling that upheld Executive Order No. 156 banning the importation of secondhand vehicles.

The CEZ is a free port that was created through the initiative of Sen. Juan Ponce Enrile, whose home province is Cagayan. Enrile said the Supreme Court and Malacańang were wrong to ban the importation of used vehicles.

Enrile?s son-in-law, James Kocher, runs the auto yard that is the center of Port Irene?s used-vehicle import business.

A Senate probe into the alleged smuggling of used luxury vehicles into Port Irene will begin next week.

No threat

Geroue?s company, Apollo, with about 300 imported used vehicles, has the biggest number of units in stock among the eight registered car dealers at the CEZ lot in Casambalangan village here.

Geroue allayed Amcham?s fears that the volume of vehicles being brought into Port Irene would have an adverse effect on the economy.

?We are not a threat to the economy. In fact, we are helping the economy, especially the local economy of Cagayan and Santa Ana, which I consider a depressed area. We are giving a chance to the people of Cagayan to have a car, to have a life,? he said.

?I dare the Americans to come to Santa Ana and invest here if they really are concerned for the economy of the country,? he added.

Jonathan Ramos, general manager and part owner of Kaminary Corp., another used car dealership, is dismayed that the presence of sports utility vehicles and higher model cars at their yards has become the basis for allegations that they were engaged in the importation of ?luxury vehicles.?

?If they call a Mitsubishi Pajero, which has become very common, a luxury vehicle, I wonder what is not a luxury vehicle,? he said.

He said their cars may have looked expensive to the Amcham ?because we already made some refurbishing on them.?

Ralph Patrick Iloy, port operations specialist at the CEZ, said that the allegations should not be a matter of concern for CEZ management and the car dealers because ?we know that the accusations are not true.?

He gave a detailed description of the procedures followed by the CEZ on used-car importations?from the importer?s filing of a permit until the purchase of vehicles by customers.

This process belied charges that smuggling could happen here, he said.

4 checkpoints

According to Iloy, agents from the agencies involved, like the Bureau of Customs, the Presidential Anti-Smuggling Group, the Land Transportation Office and the Bureau of Internal Revenue, monitor this process, especially when the vehicles are being unloaded from the ships.

The cars, which are inspected by CEZ security force before they are unloaded from the ships, undergo a ?strict? inventory by authorities and have to pass through four checkpoints before these are brought to the car lot, about 1.5 km from the port.

?Each agency sees to it that these processes are followed because they have to protect their mandated tasks,? Iloy said.

The imported-car resale business remains brisk at the free port zone despite the allegations of smuggling.

Sylvia Geroue, general manager of Apollo, shrugged off the Amcham report and expressed relief that it has not deterred customers from buying.

?We would rather try to learn to get used to [such issues]. It is just saddening at times that our business is being portrayed as something illegal,? she said.

When the Inquirer visited the Apollo car lot last Thursday, Sylvia had just closed a deal with a Santa Ana businessman who bought a secondhand 1996 Mitsubishi Grandia for P310,000.

Despite the issue of smuggling that has cast a shadow on their operations, Sylvia said Apollo still manages to sell an average of 15 imported cars a month.

44th shipment

Iloy said the Cagayan Export Zone Authority (CEZA) had accredited eight used-car retailers to operate at Port Irene. The retailers are renting a five-hectare car lot purchased by Forerunner Multi-purpose Cooperative Inc., the sole used-cars broker accredited by the CEZA, not Apollo International Trading Corp. as the Amcham reported.

He said CEZA documents showed that on July 20, a new shipment of 362 used cars from Japan arrived at Port Irene on board the Baybridge.

The latest shipment, the 44th since the first shipment arrived in June 2005, brought the total number of imported vehicles that were shipped into the port to 9,107, Iloy said.

?Of this number, roughly about 3 percent are considered luxury but which are, in fact, 10 to 15 years old already. This is contrary to the [Amcham] report that the bulk of these imported vehicles are luxury cars,? he said.

Orlando Padilla, operations manager of Kaminary, said the company?s car sales peak during the harvest season, or during the yearend holidays, as most of their buyers are farmers and overseas Filipino workers who are home on holiday.

?These are middle-income families whose one dream is to have a car of their own, coming from the little savings that they have from years of hard work. We are just happy to help them realize that dream,? he said.

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