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Gov't must contest appellate court ruling on used car ban
Karen L. Lema, BusinessWorld (23 Feb 2005)

MANILA, PHILIPPINES: The government should seek the reconsideration of a Court of Appeals (CA) decision which declared a ban on used car imports as unconstitutional, Finance Sec. Cesar A.V. Purisima yesterday said.

Mr. Purisima, who served as Trade Secretary prior to his appointment at the Finance Department, said he is standing by Executive Order 156 because "it is an economic, environmental and safety policy decision by the executive branch."

"It is not an issue the court should interfere with. Last year there were more imported used cars than new cars registered with the LTO [Land Transportation Office]," Mr. Purisima told BusinessWorld.

The government has 15 days from receipt of the appellate court's decision to file a motion for reconsideration. Should the CA uphold its decision, government lawyers may elevate the case to the Supreme Court.

The CA has ruled that President Gloria Macapagal Arroyo cannot ban the importation of used motor vehicles into the country. In a 31-page decision penned by Associate Justice Perlita J. Tria Tirona, the court said "there is no law granting the President of the Republic of the Philippines authority to prohibit the importation of used motor vehicles." It said EO 156 "has no constitutional and statutory basis and is therefore invalid."

Mrs. Arroyo issued EO 156 in December 2002. Among others, it effectively banned the importation into the country of all types of used motor vehicles, except for vehicles owned and for personal use of returning residents, vehicles for the diplomatic corps; certain types of trucks and buses, and special purpose vehicles

But even before the directive saw full implementation, importers and auctioneers, mostly from Olongapo, obtained restraining orders from local courts.

These groups led by the Motor Vehicles Importers Association of Subic Bay Freeport Inc., argued that the import ban contravenes the country's commitments to the World Trade Organization.

As Trade secretary, Mr. Purisima pushed for the speedy resolution of the case lest the growth of the car industry remain problematic. The local assembly industry continues to lag behind its Southeast Asian neighbors because of used cars sold through informal channels at much cheaper prices.

Government data showed that while the local auto industry sold a total of 90,535 vehicles last year, the LTO recorded some 170,000 in new vehicle registrations. This means that local car companies are losing market share to importers of secondhand vehicles which are mostly based at the Subic Bay Freeport Zone in Olongapo, the Trade department said.

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