SBMA still keen on $7.5-B investment target | SubicNewsLink

04 March 2009

SBMA still keen on $7.5-B investment target

Despite the global economic slowdown that has affected some business locators in this free port, the Subic Bay Metropolitan Authority (SBMA) is still eyeing a $7.5 billion investment target in 2010 — a figure that is thrice the cumulative investment commitments recorded here in 2005.

SBMA Administrator Armand Arreza said in the recent State of the Freeport Address (SOFA), an annual event organized by the Subic Bay Freeport Chamber of Commerce (SBFCC), that the 2010 target he has set upon taking over as administrator in 2006 still stands.

“If you ask whether we can still achieve the ambitious goals that we have set for ourselves, with apologies to Barack Obama, I now say: Yes, we can!” Arreza asserted.

Arreza noted that cumulative investments in Subic last year have already exceeded the original 2010 target of $5 billion when actual investment commitments reached $5.8 billion. This represented a 116 percent increase over the original target, but is still some $1.7 billion short of the “enhanced” 2010 target of $7.5 billion.

In terms of direct employment, meanwhile, Arreza said that actual figures reached 87,502 in 2008, or 87.5 percent of the original target of 100,000. The enhanced target, meanwhile, has been set at 150,000.

Arreza added that Subic’s annual exports, which stood at $719 million in 2005, have grown to $977 million in 2008, or 65 percent of the original 2010 target of $1.5 billion. Still, the SBMA is aiming for a $2 billion annual record based on its enhanced target for 2010, Arreza said.

To achieve the enhanced targets, Arreza stressed that the SBMA and business locators in Subic “should change the name of the game” in four areas: logistics, manufacturing, tourism, and services, specifically in business process outsourcing and knowledge-based industries.

In logistics, Arreza said it is imperative to build in Subic a viable regional transshipment center, with daily ship calls to major regional logistics hubs.

This, he said, could be achieved by attracting heavy port users in Central Luzon, implementing automated import-export document procedures, attracting an air cargo carrier to replace FedEx, and earmarking P311 million this year for additional investments in warehouses and logistics facilities.

In the manufacturing sector, Arreza proposed to establish stronger clusters to capture greater value, encourage greater investment in R&D, capitalize on Hanjin’s presence to build a strong maritime industry, and develop additional industrial estates along the Subic-Clark corridor.

Tourism, meanwhile, could be further enhanced by tapping flights to Clark to build a foreign market, developing new cost-competitive tour packages, and introducing a hop-on, hop-off transportation system in the Subic Freeport..

Arreza also told locators here that Subic still “has no significant presence in the Philippine BPO market.” This situation, he added, could be corrected by providing additional incentives to pioneering companies, working with local schools to enhance curriculum, and developing an IT park within the Freeport zone.

Along this line, he also proposed to utilize in Subic the Worldwide Interoperability for Microwave Access (WiMax), a high-speed wireless data technology, as a platform for new businesses and services within the zone.

At the same time, Arreza said the SBMA would pursue outward expansion to Olongapo City, as well as neighboring areas in Zambales and Bataan in order to address the problem of limited land areas for development in the Subic Bay Freeport.

Arreza said that Olongapo would be ideal for the development of more commercial establishments, housing, and resorts, while Zambales could accommodate expansions in shipbuilding, utilities, as well as housing and resort industries.

Neighboring areas in Bataan, meanwhile, could be used for industrial estates, resort development, reforestation activities, and preservation of indigenous people’s domains, Arreza added. (SBMA Corporate Communications)

PHOTO: SBMA Administrator Armand Arreza is optimistic that the Subic Bay Freeport Zone could generate more investments, despite the global economic slowdown.