SUBIC’S BOLD STROKES

The SBMA unveils plan to make free port Asean’s production, logistics hub

By HENRY EMPEÑO

SUBIC BAY FREEPORT — If officials of the Subic Bay Metropolitan Authority (SBMA) would have their way, the Subic Bay Freeport and Special Economic Zone would be the country’s next big thing after industrial Metro-Manila.

In broad strokes, SBMA Chairman Martin Diño and SBMA Administrator Wilma Eisma outlined last Monday an ambitious program to expand the Subic Bay Freeport’s infrastructure, and then leverage the same to position Subic as a major production and distribution hub in the Asean Region.

According to Diño and Eisma, both appointees of President Rodrigo Duterte, the SBMA would echo the national mantra of “Build, Build, Build” to keep Subic Bay sustainable, as well as to help in national developmental efforts.

SBMA’s wish list includes the $40-million upgrade of the Subic Bay International Airport; the $120-million expansion of Subic’s bulk cargo-handling facilities; $200-million expansion of the New Container Terminal; $232-million bypass road from the Subic Seaport to the Subic-Clark-Tarlac Expressway (SCTEx); and the $40-million widening of the Tipo Road leading to Subic Freeport.

Topping these are several proposals that are seen to further improve Subic’s capacity and attractiveness as a free port and special economic zone. These are the proposed $440-million bypass road connecting the SCTEx to Castillejos, Zambales, which serves as the major gateway to the Hanjin shipyard at Subic’s Redondo Peninsula; the $2-billion multi-modal road from Subic Port to Manila Port that would pass through coastal areas in Bataan, Pampanga and Bulacan.

Diño and Eisma both maintained during their “State of the Freeport Address” (SOFA) on Monday, that keeping Subic’s competitive advantage is the only way to go.

“Expanding Subic’s infrastructure will position the Freeport as a production and distribution hub in the Asean Region, increase the trading activities in the Freeport, bring in more industries, boost tourism, increase employment,” Diño pointed out.

At the same time, it will “decongest Metro Manila and encourage the development of nearby communities,” he added.

Staying on top

The plan hinges much on improving on what others before them had already built and accomplished—a strategy successfully employed by then SBMA Chairman Richard Gordon when he first took over the mantle of managing Subic Bay after the US Navy vacated it in 1992.

In Gordon’s time, the military barracks were converted into hotels and mess halls into restaurants to develop local tourism; repair shops and warehouses were turned into factories and manufacturing assemblies to boost industry; and piers, airport, medical dispensary, post-exchange stores, power and fuel stations, housing units and other military facilities were adapted for civilian use.

The succeeding administrations added on new industrial parks, a container terminal, themed tourist parks and related attractions, new hotels and restaurants, as well as a mall that made Subic the country’s premier free port and also one of the biggest tourism draws in the country today.

As one of the most successful cases of conversion for military bases across the globe, the Subic Bay Freeport rose to become one of the biggest earners of foreign direct investments in the country with cumulative investments of more than $10 billion today.

Meanwhile, the SBMA, which is mandated to manage the free port zone, had announced “unprecedented” increases in its gross income in recent years, consistent with a rising trend in gross income that started out at P200 million in 1993 a year after the establishment of the Freeport, then rising to P800 million in 1996, P1.54 billion in 2002, P1.57 billion in 2008, P1.63 billion in 2012, P2.44 billion in 2014, and P2.75 billion in 2015.

The recent record incomes reversed the agency’s dismal financial performance starting in 2012, when it posted a net income of P800 million from a P1.1-billion loss the previous year and a negative record of P2.54 billion—the agency’s biggest beating—in 2008.

Cargo ships at Subic container terminal - HZ

Holding on

So far, Subic is keeping up with its legacy from recent years, said Administrator Eisma, who painted a picture of satisfactory performance for the SBMA in last Monday’s SOFA.

Comparing the agency’s performance in the first quarter of 2017 to that of last year, Eisma noted a 7.59 percent increase in revenue from P676.3 million in Q1 2016 to P727.6 million in Q1 2017, and a 148 percent increase in net income from P18.8 million in Q1 2016 to P46.7 million in Q1 2017.

And while the agency’s operating income dipped by 4.35 percent, its cash and investments record increased by 24.84 percent in the same period, Eisma said.

Meanwhile, the Subic Freeport recorded a total of P1.42 billion in new investments as of February this year, a slight increase over the P1.40 billion recorded in the same period last year.

Among the new projects approved were the P42-billion proposal for an industrial park and renewable energy facility by Dynamik Konstruk Corp.; the P200-million ship-to-ship transfer operations for liquefied natural gas by Teekay Swan and JOVO; and the P4.6-billion golf and leisure complex project by DM Leisure Corp.

In job generation, Eisma said that Subic recently recorded an increase of 12 percent in its work force, from a total of 103,289 in February 2016 to 115,272 in February 2017.

Eisma also announced positive figures for the Subic sea port, which posted a 9 percent increase in revenue this year, or from P282.7 million in Q1 2016 to P309 million in Q1 2017, even when the number of ship calls dropped by 18 percent in the same period.

She added that an increase in volume of both containerized and non-containerized cargoes, which was recorded at 33,031 TEUs and 1,826,519 metric tons, respectively, made up for the slack in ship calls.

Tourism figures, however, showed a slight drop of 5 percent in terms of visitor arrivals, or from 2,060,383 in Q1 2016 to 1,958,344 in Q1 2017, and a 9 percent decrease in tourist arrivals from 448,782 in Q1 2016 to 409,377 in Q1 2017.

The ban in school educational trips and a drop in the number of MICE events had apparently impacted on local tourism and caused the decline, Eisma added.

“We hope that the next time we make a report, we would have better figures,” the SBMA administrator said.

Getting there

To reach the next level in managing the Subic Bay Freeport Zone, the SBMA has charted a 10-point program that is anchored on the traditional Filipino values of “malasakit” (social responsibility) and “kusang-loob” (initiative).

Eisma ticked off the 10-point program as:

  • Policy Reforms and Good Governance, which includes an intensified campaign against corruption, smuggling and illicit trade; support for amendments to RA 7227, the Bases Conversion Law; and support for government programs to modernize incentive package for investors and to end contractualization;
  • Sustainable Development, which involves maintenance of clean and environment-friendly business practices; addressing needs for alternative water sources and sewage and septage facilities; and securing ISO 14001 certification for environmental management system;
  • Safety and Security, which includes improvement of public safety and security systems, strengthening security capability, establishing cyber security protocol, intensifying drug-free Freeport campaign, and monitoring safety programs of locator-companies;
  • Community engagement, which involves revitalization of culture of volunteerism, discipline, malasakit and kusang-loob within the Freeport community; coordination with local government units for capacity-building; and provision of scholarship for deserving volunteers and their dependents;
  • Locator Service Excellence, which includes anti-red tape measures; creation of one-stop shops; and institutionalization of red carpet treatment for business locators;
  • Subic Freeport Gateway, which seeks to re-establish the Subic Bay International Airport as a world-class facility;
  • Attracting foreign direct investments (FDIs) and Micro, small and medium enterprises (MSMEs), with focus on high-technology industries (R&D, BPO, and ICT), premier educational institutions, and launching aggressive marketing campaign to promote the Freeport as marketing pivot to China and Russia;
  • Tourism Star, which seeks to create a Subic tourism brand, promote Subic as the next cruise ship playground, expand existing tourism campaigns, and maximize Seair’s Clark-China flights;
  • “Build, Build, Build,” which includes improvement of road infrastructure, expansion of the Naval Supply Depot facilities, implementation of the Luzon cargo railway project, and construction of the SBMA Corporate Tower and Subic Freeport Museum; and
  • Freeport Expansion, which involves the identification of available areas for expanding Freeport land area, and cooperation with concerned local government units for development of expansion areas.

Eisma and Diño had captioned their recent State of the Freeport report as “Winning thru excellence,” an allusion to the all-encompassing change for the better on all fronts in the Subic Bay Freeport.

The program could very well serve as a bold stroke that will bring all concerned to the next level and keep Subic on top of the game: from the agency which manages the Freeport, to the locator-companies that provide capital, and the community which contributes the work force and other essential services that keep the Freeport going.

PHOTOS:

[1] Sailboats frolic at the Subic Freeport waterfront, where a US Navy ship is docked a short distance from the SBMA main office, highlighting the crucial roles of tourism and industry in the economy of the Subic Bay Freeport.

[2] Cargo ships dock at Subic Freeport’s New Container Terminal, bringing in more business to boost the local economy

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