Customs exec: Gov’t to lose P300M yearly in revenues from used-car importation

STA. ANA, Cagayan—The government stands to lose at least P300 million in revenues yearly should the used-car industry at the Cagayan Special Economic Zone and Freeport (CSEZFP) be stopped following a Supreme Court ruling that upheld the ban on the importation of used cars and vans for resale in the country.

“Sayang talaga (It will definitely be a huge loss),” said Melanie Alameda, deputy collector of the Bureau of Customs (BOC), citing how the used-car importation had increased the agency’s collection by 1,000 times since it began in 2007.

The trade is facing stoppage after the Supreme Court, in a Jan. 7 decision, affirmed the validity of Executive Order No. 156, which imposes a partial ban on the entry of used vehicles into the country.

Customs Commissioner Ruffy Biazon earlier ordered its field office here to stop the processing of papers for about 200 vehicles that arrived at Port Irene last week, or more than a month after the court’s ruling.

Officials of the Cagayan Economic Zone Authority (Ceza), who issued permits to car importers, have expressed concern over the looming economic losses that the local community and the government will incur once the ban becomes permanent.

Alameda said the BOC district office in Aparri, which covers the Cagayan free port, used to generate a yearly collection of about P300,000 before the start of the used-car trading business. This, however, jumped to about P300 million yearly when it started to operate, she said.

“In January [this year], we collected about P26 million, exceeding our target by more than P2 million,” Alameda said.

The amount, she said, pertained only to collections derived from import taxes and duties by the BOC. It did not include revenues generated by the Land Transportation Office (LTO) from the registration of the vehicles.

LTO officials in the region could not be reached for comment on Wednesday.

But Jaime Vicente, president of the Automotive Rebuilders Industry of Cagayan Inc., said the trade had propelled the LTO office covering CSEZFP to one of the highest income-generating field offices in the country.

“This industry has helped to a great extent the local economy,” he said.

Sta. Ana, a second-class town (with an average income of P45 million to P55 million), is home to 30,458 residents.

5,400 vehicles last year

In 2012 alone, car traders here imported around 5,400 vehicles contained in 18 shipments, according to documents obtained from Forerunner Multi Sources Inc., one of two licensed importers of used vehicles at the CSEZFP.

Ceza, which manages and operates the free port, also generates income from the importers’ use of Port Irene in Casambalangan village here, where the shiploads of imported vehicles are unloaded, said Nilo Aldeguer, Ceza senior administrator.

“It’s still the (BOC) and the LTO that will suffer the most from this,” he said, referring to the high court ruling.

Ceza earnings

Since 2008, Ceza has earned P24.6 million from port charges imposed on the imported shipments, including its shares from pilotage, arrastre and stevedoring charges, or those imposed for services rendered by the port for the docking of a ship and unloading of cargo, records showed.

Cagayan Rep. Jack Enrile, whose district covers Sta. Ana town where the CSEZFP is located, said he supported the Supreme Court ruling banning the importation of used cars into the country.

“Those who have a problem with the Supreme Court ruling can contest it, but any such importation must stop in the meantime,” Enrile said in a statement.

“If there were instances of importation in defiance of the ban, backed with documentary proof, such matters should be taken directly to the customs officials, to the mayor or to the governor. Those found to be defying the order not to import used cars must be arrested,” he said.

Mayor Darwin Tobias, however, allayed fears that the imminent stoppage of business activities in the free port’s used-car industry would result in loss of economic livelihood for the people of Sta. Ana.

Minimal impact

“If there is an impact [on employment], it will be minimal as there are only a few of our residents who are directly employed by these activities,” Tobias said.

“Most of those employed there are not from Sta. Ana or even the province of Cagayan,” he added.

The trade has also spawned business activity in the fishing village of Casambalangan, in the form of boarding houses and restaurants being patronized by nonresident workers.

“But I am confident that our town can rebound from the effects of the stoppage of the [used-car trade] because we also have drafted alternatives for those who will be affected if it will be permanently stopped,” Tobias said.

The mayor’s statement contradicted an earlier statement by Jose Mari Ponce, Ceza administrator, that about 70 percent of the estimated 1,000 jobs created by the used-car industry were held by locals.

Low pay

Two workers interviewed by the Inquirer complained of the low pay that they were getting from cleaning imported cars and vans unloaded here.

“We’re just trying to hang on because we are after the work experience that we can get here,” said a 20-year-old worker from a neighboring village here.

Johnny Costales, who operates an eatery in Casambalangan, expressed concern that the pullout of the imported used-car trade would mean less income for him.

“But if it’s the government that will say the industry has to be shut down, then there is nothing we can do. We have to accept that,” he said.