05 July 2010

SBMA’s manpower subsidiary suspends operations

“We’ve exhausted all possible means to keep it operating,” this was how Atty. Ed Tamondong described efforts to resuscitate the manpower subsidiary of the Subic Bay Metropolitan Authority which he heads, the Freeport Service Corp. (FSC).

“(FSC has) no more source of revenue, we can no longer sustain the expenses for salaries and operations,” Tamondong said as he confirmed the decision of the board to mothball the company.

The FSC Board, which he has chaired since July last year, also decided last Friday (June 25) to give the remaining 240 employees separation pay equivalent to one month for every year of service.

The remaining FSC assets – two gasoline stations and a couple of beach facilities - have to be leased or put under private management to earn the amount needed to pay separation benefits and other obligations.

“Until we are ready to pay, we will not serve the retrenchment notice,” Tamondong added. FSC employees will be given 30 days notice before their separation from service takes effect.

Meanwhile, SBMA Administrator Armand Arreza directed Labor Department Manager Atty. Severo Pastor, Jr. to prepare a program to assist the workers who will be retrenched.

FSC was created in 1995 to provide manpower services needed by the SBMA. The SBMA leased out to its subsidiary several tourism facilities under a revenue sharing arrangement, with the SBMA share fixed at only 5 percent .

According to Tamondong, however, the FSC has never remitted any share to SBMA, prompting the agency to get back most of its assets over the past two or three years.
Since 2000, the SBMA has been subsidizing FSC to the tune of P 6 million monthly or P 72 million a year to cover salary and operating expenses.

The FSC’s financial problem was aggravated by its “bloated” manpower. More than 800 personnel were listed in its payroll before the first manpower reduction was undertaken in 2008.

“For the size of its business operations, 200 would have been enough,” Tamondong said.

In the first manpower reduction, some 652 FSC employees were absorbed by the SBMA. The SBMA also advanced some P 40 million for the partial payment of their separation benefits.

With the company’s manpower down to 240, the SBMA reduced its monthly subsidy to the FSC to P 4 million a month until it was totally scrapped by January this year.

With the revenues from its remaining assets barely enough to keep it afloat, the FSC borrowed another P 4 million from SBMA in January for personnel salaries. In the summer months, which was peak season for tourism, the beleaguered SBMA subsidiary survived from revenues from its gasoline stations and beach facilities.

“Now it’s the lean season again, walang kita,” Tamondong said, adding, “Rather than pile up debts, the board decided to implement its decision last February or March to mothball the company.” (SBMA Corporate Communications)