Clark and Subic Economic Zones: Positioned to compete globally as logistics and transportations hubs

LOS ANGELES – Dennis L. Wright is the American president of Peregrine Development International. When he talks about the Philippines, he is more knowledgeable about the topic compared to some Filipinos. “The optimism in the Philippines is based on what you can see, and you only have to drive around Metro Manila to know this,” he told Asian Journal last week during a forum on Clark and Subic Bay Freeports at a hotel near Los Angeles International Airport.

Wright had lived in the Philippines for about thirty years, and had been married to a Filipina for twenty-five years. “I have watched the Philippines up close and personal. I can tell you right now that the Philippines is the darling of the investment community,” Wright said. “Three years ago, you would not see a single sky crane anywhere in Metro Manila,” Wright offered. “Today, you look out and see them all over. If you go to Subic (Bay) there is no lay of land that you could do a project on. If you look at the number of hotels feeding the tourist industry, and the signs of medical tourism, it is happening. The container ports are there. No matter where you go, you are seeing a building boom,” Wright asserted. “It is really happening now; it is materializing.”

This was Wright’s response to a question from one of the journalists who asked why progress has not trickled down to the impoverished and middle-class Filipinos despite the ongoing construction boom and economic activities.

To buttress his assertions, Wright drew compared the movie, The Perfect Storm to the current economic environment in the Philippines. “In the movie, several everyday occurrences and events came together at precisely the right time and in an unprecedented manner to create “the perfect storm on the open sea,” he explained. “The same phenomenon is now occurring in the Philippine economy – except in this case, it is the forces of the market and business communities acting in unison.”

“The first force is the effect of the Chinese economy, which is the world’s third largest and is poised to outpace the US, along with the Philippines’ strategic position on the doorstep of China,” Wright explained. “The second influence impacting Philippine growth is the country’s geographic position in the center of Southeast Asia and at the crossroads of the Pacific,” Wright said.

His company, Dubai-based Peregrine Development International, has made a $2.5 Billion investment at Clark called Global Gateway Logistics City – a 177-hectare master planned aviation-oriented logistics and business center aimed at serving aviation and logistics-related businesses, including warehousing, distribution, and transportation.

Confronted with the devastating financial crisis in the West, many Middle Eastern investors, including Peregrine, are looking to diversify to minimize their risk. Many Arabs have looked to other markets such as Southeast Asia and the Philippines.

“This optimism is not something in the future,” Dwight said. “I went to a Pussycat Dolls concert (in Manila) about two weeks ago,” he revealed. “30,000 Filipinos went and the most expensive seat was PhP6,650; the next was PhP5,000. Why? Filipinos have money that they are spending. It’s trickle-down economics.”

Wright said that the despite the global recession the Overseas Filipino Workers (OFW) remittances are on track of what it was last year: $15 Billion again this year. “Why? The mix of overseas Filipinos that are going is higher. You have more professionals, nurses, train operators, engineers. A lot of Filipinos are in recession-proof jobs, and the Saudis depend on the OFW workforce, and they are not going to let them go,” Wright explained.

The Philippine government has converted Clark and Subic into viable economic zones since they were taken over from the United States in 1991. Initially, after the bases’ conversion into economic zones, the bases operated independently from each other. Today, these zones, although being run by two different government agencies, are working with each other to achieve the same goals, positioning themselves as globally competitive air, ship and logistics hubs in the Southeast Asian-Pacific region.

“We are now not only talking business but also doing business,” declared Secretary and Internal Affairs Adviser Edgardo Pamintuan. “This is now walking the talk,” he quipped. “Of course all these would not have been possible were it not for the genius and foresight of President Gloria Arroyo, to transform these bases into bastions of economic activity,” Pamintuan commented.

He said that Clark is now the home of the Diosdado Macapagal International Airport, which is being managed by the Clark International Airport Corporation. The DMIA complex is comprised of a 2,367-hectare area within the Clark Freeport Zone. The airport is now designated as a new international gateway. “Last year, DMIA had an international traffic of 500,000 passengers,” Pamintuan announced. “This year, we will have no less than 20 per cent of growth.” Pamintuan said that the DMIA has become the favorite airport of low-fair airlines.

The DMIA is now handling international flights to Korea, Singapore, Kuala Lumpur, Malaysia, Hong Kong, Macau and Kota Kinabalu. There are now 11 domestic flights to Cebu and to Boracay.

Since the construction of the 100-kilometer highway connecting Subic Bay with Clark -- the umbilical cord between the two zones -- standards and processes have been laid down between the two free ports.

Pamintuan also announced that a North Rail system connecting Clark to Manila is in the pipeline. At Subic, two new terminals have been added that are capable of handling up to 600,000 containers. “We can do more during the last 10 months of this administration,” Pamintuan said, at the same acknowledging that poverty is still rampant. “There are still lots of people who are living in quagmire and poverty,” he said. “You cannot do it overnight.”

He said that the country has achieved the highest gross domestic product (GDP) of 7.2 per cent in 2007, at the time that the global economy was creeping in. Last year, despite the recession, the country still managed a 4.6 per cent growth in GDP, and this year, still managed to grow by 1 per cent. “We have been paying off our debts ahead of schedule,” Pamintuan revealed.

“But the opposition does not want to look at the doughnut,” Pamintuan observed. “They like to look at the hole of the doughnut. They do not want our projects to be successful. They do not want us to look pogi.” (They do not want us to look good). (Rene Villaroman/AJPress)

Read More

SBMA, PCE set 'GO NEGOSYO’ seminars for displaced Subic workers

The Subic Bay Metropolitan Authority (SBMA) and the Philippine Center for Entrepreneurship (PCE) have joined forces to empower displaced Subic workers through proper education on the fundamentals of running a business.

SBMA administrator Armand Arreza and PCE founding trustee Ma. Jose Concepcion III signed a memorandum of understanding (MOU) at the Manila Polo Club in Makati City on Monday for a collaboration in the conduct of the “Go Negosyo” seminar series.

Arreza said the seminar will initially benefit 200 former workers in this free port who are planning to venture into small- to medium-size enterprises (SMEs), particularly in the tourism industry.

The two-day comprehensive seminar, including books and hand-outs, which normally costs about P1,000 per participant, will be given free to the workers, Arreza said.

The signing of the agreement was witnessed by SBMA labor manager Severo Pastor Jr., SBMA public relations manager Armina Belleza Llamas, PCE executive director Ramon Lopez, and PCE programs development manager Myra Dorothy Lorredo.

PCE is a non-stock, non-profit organization that advocates “Go Negosyo” and believes that Filipinos can address poverty by engaging in entrepreneurship.

“If all Filipinos will form a small group and start their own small or medium enterprises, our economy will definitely boom to progress,” said Concepcion who is also the presidential consultant for entrepreneurship.

“Putting up your own business is easy, especially when you have the capital. However, keeping the business going and profitable is another issue and this is where PCE comes in,” he added.

Under the SBMA-PCE agreement, the PCE will conduct a series of seminars, which focus on developing entrepreneurial mindsets and unifying key stakeholders to build an environment conducive to starting a business.

Concepcion said that many small and medium entrepreneurs lose their business in a short span of operation due to their failure to understand clearly some basic business know-how, or because of the lack of financial studies.

“For instance, it is important that the entrepreneurs know who their clients are, what product to offer, or how to keep records of the business. This is what we are going to teach these aspiring entrepreneurs,” he said.

“More importantly”, Concepcion added, “Kung saan ka magaling iyon ang dapat ma-highlight para tiyak na mayroon kang interes at naiitindihan mo ang loob at labas ng negosyo.”

Arreza, meanwhile, said the seminar is basically a “culture training,” which will help participants understand fully the compelling reasons for starting a business, choosing the right market, preparing business proposals for bank financing, and managing finances effectively.

“Marami kasi sa kababayan natin ang kung ano na lang ang gustong ibenta dahil malakas ito sa market, but later on maggagayahan at darami ang magkakaparehong paninda at malulugi na,” Arreza said.

The SBMA official also said that to ensure the viability of the SMEs to be put up by former Subic workers, the SBMA is currently studying the possibility of limiting the type of businesses that can be operated by foreigners here.

Noting that some foreign investors have lately ventured into operating even small kiosks inside the Subic Freeport, Arreza said that this type of operation should be reserved for businesses put up by former Subic workers.

“In the future, we would like to see that 20 percent of the Subic workforce will come from SMEs,” Arreza also said. (SBMA Corporate Communications)


Photo caption: PCE founding trustee Ma. Jose Concepcion III and SBMA Administrator Armand Arreza sign an agreement to conduct "Go Negosyo" seminars for displaced workers in the Subic Bay Freeport.

Read More

Aussie ambassador leads ‘hell ship’ remembrance in Subic

Sixty-seven years after the sinking of “hell ship” Montevideo Maru off the coast of Luzon, Australian nationals led by their ambassador to the Philippines Rod Smith went all the way to Subic Bay to honor their fallen countrymen.

In a simple ceremony held at the Hellship Memorial fronting the Subic Bay Metropolitan Authority (SBMA) administration building, Smith and World War-II veterans, as well as relatives of those who perished onboard Montevideo Maru, unveiled a plaque memorializing “Australia’s greatest disaster at sea.”

Smith said “hell ships” refer to vessels used by the Japanese Imperial Army to transport Allied prisoners of war (POW) to places where they would be used for forced labor.

As Allied forces closed in at the end of World War II, these POWs were transferred in cargo holds of hell ships with little air, food, or water for journeys lasting for weeks.

These hell ships, or “Jigoku Sen” in Japanese, were unmarked, making them legitimate targets for the Allied forces.

The ill-fated Montevideo Maru which took off from Rabaul, Papua New Guinea on June 22, 1942 has 1,054 people onboard, including 71 Japanese crewmen and guards. It was torpedoed by the American submarine Sturgeon nine days later, as it was on its way to Hainan Island..

“There was no trace of these men taken prisoner, and the families of these men still grieve,” said Smith.

The Australian nationals consoled each other through prayers, and laid wreaths during the ceremony here which started at 11:00 a.m. and ended promptly at noon..

“This is ample proof that emotional wounds never really healed,” said a teary-eyed Clive Troy, member of the Australian Return Service League (RSL), who promotes Australian support for the Hellships Memorial here.

Also present at the ceremony, aside from members of the Australian Embassy and SBMA officials, were Papua New Guinea Association of Australia representative Andrea Williams, Olongapo City Mayor James “Bong” Gordon Jr., and members of the Papua New Guinea Volunteer Rifles Association, RSL Subic Bay, and RSL Angeles.

The Subic memorial, which was built through private donations and inaugurated in 2005, commemorated the sinking of the hell ship Oryoku Maru that limped into the Subic Bay after being attacked by U.S. Navy aircraft on December 13, 1944. On board were 1,600 American prisoners en route to Japan.

The Oryoku Maru burned off Subic’s Naval Station after additional attacks, then sank about 100 yards off the site where the hell ship memorial stands today. (SBMA Corporate Communications)


PHOTO:
Australian Ambassador to the Philippines Rod Smith pays tribute to compatriots who perished in the “hell ship” Montevideo Maru, which sank off Luzon during World War II.

Read More

Legenda continues to defy Subic authorities

The operator of a hotel chain here has defied orders of the Subic Bay Metropolitan Authority (SBMA) to stop its operations and vacate its leased properties, claiming the free-port authority has no legal or factual basis to terminate its lease.

The Legend International Resorts Limited (LIRL), which operates the Legenda Resort Hotel and Casino, said in a statement that it continues to operate because it has both the right to do business and the right to remain in its leased premises.

Recently, the SBMA said it canceled the LIRL’s certificate of registration and tax exemption (CRTE) and permit to operate (PTO), and terminated the firm’s lease agreement after the company failed to pay its debt amounting to more than P850 million.

With its registration and permits voided, “LIRL ceased to become a duly registered Subic Bay Free-Port Zone locator, and its rights and privileges to operate a business, likewise, ceased to exist,” said SBMA Administrator Armand Arreza.

However, LIRL maintained it has the right to continue operating in Subic even after the SBMA issued a cease-and-desist order (CDO) on June 9.

When the SBMA blocked the main entrance to Legenda Hotel and closed its service bay over the weekend, LIRL responded by urging guests to use Legenda’s side entrance.

In a statement to the public, LIRL pointed out that its CRTE, which SBMA has voided as of May 22, “is a property right [that] cannot be canceled without due process of law.”

“SBMA’s cancellation thereof is without any legal or factual basis,” the LIRL said, adding it has thus appealed SBMA’s action with the office of President Arroyo.

Aside from insisting on its right to conduct business here, LIRL also said it has the right to remain in the premises because the amounts being claimed by the SBMA “represent unsubstantiated and unverified arrears,” and that the authority “continues to accept our rental payments.”

The LIRL also pointed out that SBMA’s claim of preference “is against a Hong Kong company, which is subject to Hong Kong laws on liquidation.”

“Hong Kong laws would determine matters concerning LIRL and its obligations,” the defiant Subic investor also said in the statement.

As this developed, the SBMA clarified that the LIRL is indeed a Hong Kong-registered firm that “apparently [does] business not in Hong Kong, but principally in [the Subic Bay Free Port].”

It added that LIRL’s majority shareholder, with a 59.99 percent stake, is Metroplex Berhad, a company listed on the Malaysian Stock Exchange.

According to the SBMA, Metroplex has lease agreements with the SBMA over the main Legenda facility, as well as several estates in Subic that include some properties the firm had given up recently.

As to why the SBMA is seeking to repossess properties now occupied by LIRL, it said the Malaysian-owned firm “owes SBMA unpaid rentals and casino share since 2004” that now total P850.17 million.

The SBMA said after the LIRL experienced financial difficulties, the firm filed a debtor-initiated petition for corporate rehabilitation on November 5, 2004, with the Regional Trial court in Olongapo City, leading the same court to issue a stay order that barred the SBMA from collecting on its claims from the beleaguered firm.

It added that following a creditor-initiated petition for rehabilitation on October 13, 2006, the court finally approved a rehabilitation plan that was premised on, among others, “reestablishing gaming operations, as well as the continuation of the existing hospitality business.”

However, the SBMA said two years after the LIRL rehabilitation plan was approved, it noted that “the said plan was going nowhere.”

Thus, on October 9, 2008, the SBMA filed a motion to terminate the rehabilitation proceedings, arguing that the LIRL had failed to get a casino license, and that it had given up its leases on other hotels and entertainment facilities that were an integral part of the firm’s hospitality business.

On February 9, the court granted the SBMA’s motion to dismiss the rehabilitation case and lift the stay order that the court has issued earlier, thus leading LIRL’s institutional financial creditors to seek the issuance of temporary restraining order (TRO) against the SBMA.

However, the three different divisions of the Court of Appeals with whom the petitions were filed had not issued any TRO or writ of preliminary injunction, the SBMA said.

In the absence of any TRO or injunction, the SBMA said it sent LIRL on February 12 a notice of default on the lease of Legenda Suites, a hotel complex in Subic’s Cubi Point, and a notice of termination on the lease on the Legenda Hotel, which is located across the road from the SBMA’s main office building.

The SBMA said it sent the notices of default and demand letters to LIRL “in order to protect the interests of the government and collect the huge unpaid rentals and casino share of LIRL.”

On April 15, the SBMA was able to repossess the Legenda Suites, using a provision in the lease agreement that in case of default, it may “immediately reenter, renovate , or relet all or part of the property and cancel all rights and privileges granted to tenants.” (Henry Empeño, Business Mirror Online)

Read More

Wartime sea tragedy to be remembered in Subic Bay

Ailsa Nisbet, 82, along with her daughter Marg Curtis and cousin Ron Hayes, will represent one of 15 Australian families at the July 1 memorial at Subic Bay (Freeport) in the Philippines.

THE hardest thing for families who lost relatives in the sinking of the Montevideo Maru during World War II was not knowing the fate of their loved ones.

But for those families, closure may finally come on Wednesday when a plaque is unveiled at an official ceremony marking Australia's worst maritime tragedy.

Melbourne, Australia - Ailsa Nisbet, 82, along with her daughter Marg Curtis and cousin Ron Hayes, will represent one of 15 Australian families at the July 1 memorial at Subic Bay in the Philippines.

They leave Melbourne today to pay respects to Ms Nisbet's brother, Private John "Jack" Groat, who was on board the Montevideo Maru when it sank on July 1, 1942, carrying 845 prisoners of war from Australia's Lark Force and 208 civilian men.

The troops had been taken prisoner after Japan invaded Rabaul in Papua New Guinea in January 1942.

The unmarked Japanese ship left occupied Rabaul on June 22, 1942 but nine days later an American submarine, unaware it was carrying allied prisoners, torpedoed it off the Philippines coast.

The sinking of the ship was not reported back to Australia, and for several years the fate of the prisoners of war was unknown.

Ms Nisbet said for years her brother's fate was a mystery.

"The family was first told he was missing," she said.

"Then they said 'missing presumed dead', then we got a message he was a prisoner of war, then we got a letter from Jack saying he was being looked after by the Japanese.

"But that's all. Mum didn't hear what happened until late 1945. And there is still doubt about it," she said.

In 1997, Ms Nisbet visited Rabaul to see where her brother was stationed and this year Ms Curtis and Mr Hayes completed a three-day trek retracing the escape many Lark Force men made during Japanese occupation.

"It's a very emotional trip," Ms Nisbet said.

"It's been many, many years and nothing has been heard of the Montevideo Maru and it's just all coming out now.

"I'm the last member of the family and it will be a closure for me to go up there."

Former federal Labor leader Kim Beazley, whose uncle Reverend Sydney Beazley was lost on the ship, is the patron of the Montevideo Maru Memorial Committee.

Phil Ainsworth, in the Philippines for the event, said the committee aimed to get more national recognition for the tragedy.

"This memorial will give the families some comfort because even now 67 years later they still feel discomforted and in grief," he said.

Another attendee is Andrea Williams, whose grandfather and great uncle were on board. She wants a government response similar to that for the recently found HMAS Sydney, another World War II sea tragedy that claimed 645 lives.

"There is a fair amount of literature on the Montevideo sinking but there are some nagging specifics, like why there was no inquiry into the fate of these men," she said.

Australian archives had several passenger lists but they were inconsistent and there was no passenger manifest, she said.

"What has happened to the nominal roll of the men apparently on board?"

Veterans' Affairs Minister Alan Griffin marked the 67th anniversary of the sinking of the Montevideo Maru in a speech to Parliament last Friday.

Mr Griffin said the Australian Government put $7200 towards the memorial and the Australian ambassador to the Philippines, Rod Smith, will attend.

"I've spoken to individuals who lost family members as part of the Montevideo Maru and I know these things remain with people forever," he said.

"I express my heartfelt sympathy for their loss." (Ilya Gridneff AAP, The Age)

Read More

Ex-Subic casino workers seek payment of back pay

With the recent closure by the Subic Bay Metropolitan Authority (SBMA) of several foreign-owned hotels and a casino here, former employees are clamoring for payment of back wages and benefits before the firm’s remaining assets are taken by its creditors.

Romeo Caoile, spokesperson for the displaced employees of Legend International Resorts Ltd. (LIRL), said the employees feared that nothing would be left to them after the creditors of the Hong Kong-registered company divide its assets to cover its debts.

“The same fate [awaits] the more than 200 employees left working at LIRL’s remaining establishments,” Caoile said.

Rehabilitation plan

In 2006, foreign investors and local non-financial creditors of LIRL, like the SBMA and the Philippine Amusement and Gaming Corp. (Pagcor), agreed to a corporate rehabilitation plan for the company that ultimately failed to restore its profitability.

Due to this, Caoile said the LIRL management decided to put regular employees on a rotation basis.

“One of the first things they did is to suspend our salaries and benefits, and then they employed us on a rotation basis. Then we were retrenched when we did not accept to work as casual employees because we had already been working there for years,” he said.

Most of LIRL’s 700 employees who lost their jobs in 2007 filed a case of illegal dismissal with the National Labor Relations Commission. “[We filed the case] to get what is rightfully ours, especially since we have lost our livelihood when they retrenched us,” Caoile said.

He said more than 200 employees lost their jobs in 2006 when Pagcor revoked LIRL’s gaming license when the firm failed to pay more than P1 billion it owed the government.

“I understand that the casino had debts to Pagcor, but the hotels still had plenty of customers,” he said.

On Friday, the SBMA shut down and barricaded LIRL’s establishments due to nonpayment of arrears.

Lawyer Robert Ongsiako, SBMA deputy administrator for legal affairs, said LIRL had over P200 million cash in bank, “excluding their movable and physical assets.”

However, Ongsiako said the SBMA cannot yet seize control of LIRL’s property. “That is another matter for the court to decide,” he said.

He said the SBMA was collecting more than P800 million from LIRL.

Efren Zubiri, the local representative of LIRL’s liquidators in Hong Kong, said the issue “should be discussed in the proper forum.” (Robert Gonzaga, Inquirer Central Luzon)

Read More

A-H1N1 quarantine facility up in Subic

Stepping up its contingency plan against the A-H1N1 virus, which has been recently declared as a pandemic threat, the Subic Bay Metropolitan Authority (SBMA) has established an A-H1N1 Quarantine Facility (AQF) at the old passenger terminal of the airport here.

SBMA administrator Armand Arreza said that with the growing cases of A-H1N1 in the country, Subic, which is a port of entry, has to be ready for any contingency.

“As one of the major tourism and investment destinations in the country, it is not impossible that an unsuspecting visitor may arrive in Subic by air, land or sea, before knowing that he or she has been infected by the virus,” Arreza said.

Putting up the AQF, Arreza added, was part of the SBMA’s contingency plan to help combat the spread of the disease, aside from stepping up the agency’s information campaign and prevention program.

Dr. Solomon Jacalne, manager of the SBMA Public Health and Safety Department (PHSD), meanwhile said that the AQF would be used primarily for members of the SBMA medical staff who were exposed to patients believed to have been infected by the A-H1N1 virus.

Jacalne said that personnel in the SBMA Dispensary are vulnerable to the virus since they attend to different patients — both foreigners and Filipinos — with various medical concerns.

The Subic AQF, Jacalne added, will also be used for the observation of Subic Bay Freeport workers and SBMA employees who opt to be quarantined in Subic.

On the other hand, Subic visitors, workers and residents who are found infected by the virus will be transferred to the Jose B. Lingad Medical Hospital in Pampanga, the only hospital in the region identified by the Department of Health (DoH) as capable of handling A-H1N1 cases.

Jacalne added that in cases where SBMA medical personnel accompanied some A-H1N1 patient to the said hospital, they would be quarantined at the AQF for 10 days instead of sending them home to avoid endangering their families and relatives.

SBMA officials who arrived from other countries may also opt for self-quarantine at the AQF, he said.

The quarantine facility, which is located at the old terminal of the Subic Bay International Airport (SBIA) in Cubi Point, can comfortably accommodate eight to 12 patients at a time, and is complete with air conditioning system, comfort room, and a receiving lounge.

Last month, the SBMA hosted a public forum on A-H1N1 influenza at the Subic Bay Exhibition and Convention Center as a first step towards raising public awareness of the disease and preventing its spread.

Some 1,500 employees of the SBMA and various firms in Subic, as well as free port residents, attended the forum that was headed by a panel of experts from the DoH Regional Epidemiology Surveillance Unit and the SBMA-PHSD. (SBMA Corporate Communications)

Read More

Subic business wants billboards banned along SCTEx

Businessmen in this free port are now advocating for a ban on commercial billboards along the scenic Subic-Clark-Tarlac Expressway (SCTEx), pointing out that an unsullied view of the natural landscape would be a better come-on for tourists.

Danny Piano, president of the Subic Bay Freeport Chamber of Commerce (SBFCC), said tourists have expressed appreciation of the billboard-free view along the SCTEx, adding that a lack of clear-cut policies on commercial billboards might spur the proliferation of giant outdoor advertisements along the 94-kilometer expressway.

“The scenery along SCTEx, when blocked by giant billboards, could also seriously harm tourism in the area,” Piano warned.

“[Billboards] will destroy the beautiful landscape, which is the foundation of the tourism industry,” Piano said during the recent taping here of The Freeport Forum, a new television show covering developments in Subic and the Clark Free Port.

He added that concerned government agencies should come up with clear and strict policies against the erection of billboards along the SCTEx, which was built to hasten the flow of goods and services between economic centers in the Central Luzon region.

Piano said Subic businessmen, who consider tourism as a major industry in this free port, believe it is in the best interest of the public to prohibit billboard advertisements along the SCTEx.

“There is a growing movement to make this so,” Piano said, adding that his group’s position is backed by several organizations and local government units (LGUs).

Piano said the SBFCC has sent a position paper on the proposed billboards ban to Bases Conversion and Development Authority (BCDA) president Narciso Abaya, who reportedly committed his agency’s full support to protect beautiful sceneries along the SCTEx.

However, Piano said the BCDA hedged on its jurisdiction over billboards erected outside the right-of-way (ROW) limits of the SCTEx, saying that outside the ROW, the rights of owners of the private properties will prevail.

Because of this, Piano said the national government must integrate policies related to the construction of billboards and place the responsibility of implementation under a single agency.

“In the meantime, agreements between [concerned] agencies and LGUs could be employed [to effect the billboards ban],” Piano said.

He added that Olongapo City has already passed a resolution for the abatement and dismantling of billboards along the SCTEx.

Last year a Pampanga board member voiced the same sentiment, and recently CDC director Maximo Sangil asked the same from Abaya, according to Piano.

Piano also pointed out that one reason why European countries like Great Britain, Germany, France, Ireland and Austria retained their appeal to visitors despite rapid development in their respective countryside was the prohibition of billboards along highways.

“Business people in these countries recognize that an unmarred landscape promotes tourism and benefits them in the long run,” Piano said.

In the United States, he added, the state of Vermont, likewise, recorded a 50-percent rise in tourism in the first two years that its highways became billboard-free.

Meanwhile, the move to ban commercial billboards along the SCTEx is gaining support from users of Facebook, a popular social-networking site online. To date, 149 Facebook users have joined the cause to preserve the scenery along the SCTEx and “save the virgin countryside from commercialism.” (Henry Empeño, Business Mirror Online)

PHOTO CAPTION
If the Subic Bay Freeport Chamber of Commerce could have its way, billboard advertising would be banned along the Subic-Clark-Tarlac Expressway for an unimpeded view of the landscape during the drive over the mountains of Zambales. (Nonie Reyes)

Read More

Court junks case vs. Hanafil, SBMA

The forcible entry charge filed by the former operator of the Subic Bay golf course against its successor, the Hanafil Golf and Tour Inc. (Hanafil), and the Subic Bay Metropolitan Authority (SBMA) has been dismissed by a court in Olongapo City.

Judge Rosemary Bautista, presiding judge of Branch 3 of the Municipal Trial Court in Cities (MTCC-3), threw out the case filed by the Universal International Group Development Corp. (UIGDC) after concluding that the Taiwanese-owned firm has engaged in forum shopping.

Bautista signed the order clearing Hanafil and the SBMA of charges of forcible entry on June 18, according to Hanafil president and CEO Benjamin John Defensor III.

In effect, the court “recognized the right of the SBMA to terminate its lease development agreement [LDA] with the UIGDC, thereby making it clear that Hanafil is the new rightful lessee of the property,” Defensor explained.

In dismissing the case filed by the UIGDC, the court noted that the complainant had filed different cases in different courts against the SBMA and Hanafil.

According to Judge Bautista, evidence submitted by the parties indicated that the UIGDC has initiated three separate actions before different courts.

These included a petition for certiorari with prayer for preliminary mandatory injunction and temporary restraining order (TRO) filed in April 2008 before the Court of Appeals (CA); the forcible entry case filed in May 2008 before the MTCC-3 in Olongapo; and the case for breach of contract and damages, annulment of lease development agreement with prayer for TRO and preliminary mandatory injunction filed in January 2009 before Branch 72 of the Regional Trial Court in Olongapo City.

Proving the presence of these cases filed before various courts, Bautista ruled that the UIGDC is guilty of forum shopping and all the elements of litis pendentia.

Hanafil, a Filipino-Korean joint venture backed by Hanatour, Korea’s biggest tour operator, took over the management of the 19-hole Subic golf course last year after winning in a public bidding for the operation of the facility.

The SBMA itself took over the facility in June 2007 after the UIGDC failed to settle financial obligations to the SBMA that have ballooned to some $150 million, as well as to honor its development commitments under its lease development agreement.

Among the unfulfilled commitments in UIGDC’s 1995 agreement with the SBMA were the construction of world-class facilities like a new clubhouse, a 100-room condominium, 30 VIP villas and a five-star hotel and resort prior to the Asia-Pacific Economic Conference summit meeting in Subic in November 1996.

Meanwhile, SBMA Administrator Armand Arreza clarified that because the LDA between SBMA and UIGDC was rescinded on June 8, 2007, by the SBMA board, a lessor-lessee relationship no longer exists between the two parties.

He added that the SBMA validly pre-terminated the LDA because the lessee committed contractual breaches.

“As a consequence of the valid pre-termination, SBMA has repossessed the golf course without any court order,” Arreza also explained.

Arreza said that no less than the Supreme Court has upheld the validity of the provisions in the LDA between UIGDC and SBMA, including the pre-termination and repossession of the property by UIGDC in case of violations by the company.

For its part, Hanafil has complied with all the requirements of the SBMA, Defensor averred.

He added that the firm has started the reconstruction of the Subic golf course into a world-class, all-weather championship golfing facility with 27 holes.

Hanafil is also completing plans to build a five-star hotel and luxury villas near the golf facility, Defensor said. (Henry Empeño, Business Mirror Online)

Read More

Firm runs Subic casino, hotel ‘illegally’ - SBMA

The Subic Bay Metropolitan Authority has asked the public to avoid conducting business with a gaming and leisure company that used to run the premier group of hotels and a casino in this freeport, saying the firm is occupying land and conducting business illegally.

In an advisory, SBMA Administrator Armand Arreza said Legend International Resorts Limited (LIRL), a Hong Kong-registered company that ran hotels and a casino here until 2006 when its gaming license was revoked, is “illegally occupying the land and improvements that constitute the Main Legenda, El Centro and Grand Legenda, and is illegally doing business [inside the freeport zone] since LIRL does not have a valid and subsisting lease agreement with SBMA.”

Arreza said the SBMA cancelled LIRL’s certificate of registration and tax exemption (CRTE) and permit to operate (PTO).

LIRL side

In a statement, LIRL accused SBMA of denying it due process.

LIRL said it has appealed the SBMA decision to the Office of the President.

It said SBMA “does not have any legal or factual basis to terminate [LIRL’s] lease.”

“Since October 2006, we are current in the payment due to the SBMA. SBMA continues to accept our rental payments,” it said.

Arreza said the firm owes the government some P850 million in unpaid rent.

“The SBMA shall proceed to take the appropriate legal action to address LIRL’s illegal occupation of its former lease premises and its illegal conduct of business,” Arreza said.

LIRL has been in a state of financial turmoil and has failed to pay its debts to creditors, including the SBMA, its officials said.

Arreza said from 2004, SBMA could not collect unpaid rent from LIRL because of pending corporate rehabilitation proceedings and an order issued by the regional trial court of Olongapo City.

Gambling woes

LIRL’s troubles worsened in 2006 when the Philippine Amusement and Gaming Corp. revoked its license to operate a casino when it failed to remit 15 percent of its revenues, or more than P1 billion a year, to Pagcor.

Also in 2006, a Hong Kong court appointed a liquidator for LIRL, whose task was to regain the company’s profitability and save the jobs of more than 1,000 employees, it was learned.

An Olongapo court in 2004 issued a stay ordered that prevented SBMA from collecting from LIRL, Arreza said.

“All of the company’s other creditors were put in the same situation,” he said.

Last February, however, the court granted SBMA’s motion to dismiss the rehabilitation proceedings and lift the stay order, Arreza said. (Robert Gonzaga, Inquirer Central Luzon)

Read More

SBMA asks firm to suspend Korean foreman

A top official of the Subic Bay Metropolitan Authority (SBMA) sought the suspension of a Korean foreman at the Hanjin shipyard who was held by company officials after he hit a Filipino worker with a steel flashlight in the face and head on Tuesday.

Arceo Malit, a deputy foreman at Unit 25 of Hanjin’s pre-outfitting section, said Lee Cheon Sik, a foreman at the assembly part, hit him for no reason.

Lee was held for investigation by Hanjin safety officials, said Taek Kyun Yoo, general manager of the Hanjin Heavy Industries & Construction Philippines Inc.

Malit, 26, was taken to the St. Jude Hospital in Olongapo City where he was treated for wounds and placed under observation.

Frustrated murder

He said he would file a frustrated murder case against Lee. Melchor Remedios, president of the workers union at Hanjin, said Lee was looking for a foreman at the fit-up section to ask why the pipes had not been installed yet at about noon Tuesday.

Malit was in the same area and Lee asked him to come with him to an office. It was on their way to the office when Lee attacked Malit, the union report said.

Armand Arreza, administrator of the Subic Bay Metropolitan Authority, asked its labor and law enforcement departments to look into the incident.

“If Lee is found guilty, we will not hesitate to turn him over to the Bureau of Immigration for appropriate action,” Arreza said in a statement.

He also asked Lee’s employer, Greenbeach, a Hanjin subcontractor, to suspend Lee pending the result of the investigation.

“We will definitely not tolerate or condone any form of violence at the workplace or any such incident that may compromise the safety and welfare of workers in the freeport,” he said.

Arreza, in his statement, said a team from the SBMA’s labor department checked on Malit’s condition at the St. Jude Hospital in Olongapo City where the worker was brought.

A CT scan, the statement said, showed that Malit did not suffer any serious head injury as a result of the blow. (Tonette Orejas, Inquirer Central Luzon Desk)

Read More

Subic Freeport reinvents itself amidst global recession

May de los Santos used to make laptops and mobile phones at a high-tech Taiwanese electronics factory in Subic Bay free port, near Manila.

She joined the ranks of the laid off as the global financial crisis kicked in, but the 31-year-old has since been training to work as a chambermaid in a local hotel.

"I don't mind going to these classes. I am used to hard work and the hotel industry is the one with demand for workers," she told AFP.

She is one of an army of laid-off workers who are being retrained to meet the demands of the free port, said Severo Pastor, an official of the Subic Bay Metropolitan Authority, the government agency that oversees the enclave.

And these days, he said, that demand is coming from tourism.

Like de los Santos, the port is adapting to the times--transforming from a light industrial zone to a tourism zone and regional logistics hub.

Free port administrator Armand Arreza says Subic's manufacturing future had been in question even before the crisis hit its electronics companies.

For years, low-wage competition from China and Vietnam has been luring companies away and a recent upgrade of Clark, just 75 kilometres (47 miles) from here rendered many of Subic's facilities redundant.

Both Subic and Clark were once US military bases that employed thousands of Filipinos. But a 1992 US military pullout left the Philippines scrambling to find alternative uses for the facilities and jobs for the locals.

Amazingly, Subic adapted swiftly and efficiently, transforming from a naval base into a 13,600-hectare (33,600-acre) free port with an international airport and factories that turned out electronics, garments, shoes, armoured vehicles and medical equipment.

Special "techno-parks" were set up for Taiwanese and Japanese manufacturers.

Federal Express (FedEx) established its Asian courier hub in 1996, using the former base's military airport while South Korea's Hanjin Heavy Industries built a shipyard in 2006 that is now the world's fourth largest.

This year however low-wage rivals abroad and the economic crisis have forced Subic factories to retrench more than 4,000 workers or place them on "forced leave," said Arreza.

FedEx shut its Subic hub in February, moving to China with its larger market and attractive perks.

Arreza said the situation is improving and some workers may be re-hired but he doubts that Subic will ever return to the days of the 1990s.

"Low-cost manufacturing is not the area where Subic is competitive," he said. "Most of our land area is protected forests and protected seas. We don't have any space to accommodate large industrial parks."

Only 4,000 hectares of Subic can be developed compared to 30,000 hectares in nearby Clark.

The future lies in tourism, medical care, ship building and logistics, using the ample space still available for warehouses especially around the largely unused Subic airport, said Arreza.

Hanjin is staying put and companies that require skilled labour may also find it more economical to remain in Subic, he said.

For displaced workers, the government is offering re-training for positions in Subic's tourism industry or even abroad.

Its well-preserved forests, wide seafront and recreational facilities and hotels have always made it popular with tourists and a new highway has made the area even more accessible to day-trippers.

There are no figures on Subic tourist arrivals but Arreza notes that between 8,000 and 10,000 cars of non-free port workers enter Subic everyday, presumably many of them carrying tourists.

Zenaida Pineda, 40, a former electronics worker here, said she now earns as much working as a chambermaid in a Subic hotel as she did at her factory job.

"I like housekeeping more because you can move around, not just stay at your work station. Besides, working on electronics hurt my eyes," she said.

Danny Piano, president of the local chamber of commerce, said, "Subic manufacturers can survive. The Philippines has the capability to do good high-end work," due to workers' better education, communication and English skills.

Subic exported $977.8 million worth of goods last year.

"There needs to be a balance between industry and tourism. After all, this is a free port," Piano said. (Mynardo Macaraig, AFP)

PHOTO: Armand Arreza, administrator of the Subic Bay free port, points to a photo of the Bay and explains his plans to convert the sprawling enclave from a light industrial zone into a tourism and logistics hub. Photo courtesy: AFP.

Read More

SBMA continues to tighten port security, taps Navy assistance

A Philippine Navy detachment equipped with fast watercraft for “hot pursuit” operations will be stationed here to complement the round-the-clock maritime surveillance system being set up in this free port, Subic officials said.

According to Subic Bay Metropolitan Authority (SBMA) administrator Armand Arreza, the Navy’s flag officer in command Vice Admiral Ferdinand Golez has already approved in principle the inter-agency cooperation to further tighten port security in Subic.

He added that an official agreement between SBMA and the Navy will be formulated and signed soon.

Arreza added that this development was an offshoot of recommendations by Rep. Roquito Ablan, chairman of the House Committee on Dangerous Drugs that conducted a series of hearings on the attempted smuggling of illegal drugs into the Subic Freeport last year.

Arreza pointed out that the lead agency in cases of smuggling, illegal fishing, drug trafficking and piracy would normally be the Philippine Coast Guard (PCG), but given PCG’s limitations in terms of manpower and vessels, he said the SBMA had to turn to the Navy for help.

“The Philipine Navy has available personnel, and a wider range of patrol ships to assist SBMA in the enforcement of maritime laws,” Arreza said.

“This partnership between SBMA and the Navy would allow us to go after fleeing vessels even when they are beyond Subic’s port limits, where the Navy has jurisdiction,” he added.

Nevertheless, the SBMA would continue to coordinate with the PCG, which has recently established an auxiliary squadron of volunteers in Subic, Arreza said.

According to Capt. Perfecto Pascual, SBMA seaport department manager, it has been agreed in initial talks with Golez that SBMA will provide an area in Subic to station Navy personnel, including a berthing area for their fast craft.

Pascual also said that it is “just proper” that a naval station be put up in Subic Freeport, which is the emerging maritime center in the Philippines, because the nearest naval detachment to Subic Bay today is in Poro Point, a long way off in the northern Luzon province of La Union.

He also said that the cooperation agreement “greatly increases our response capability, which, together with our modern maritime surveillance equipment mandated by the International Maritime Organization (IMO) and highly trained personnel, would make it impossible for crooks to use the Subic Freeport as a jumping board for smuggling.”

Still, Pascual clarified that the Navy will act independently on its mandated task of territorial defense, which includes enforcement of maritime laws, hot pursuit operations, patrolling the country’s exclusive economic zone (EEZ), and immediate response to maritime emergencies.

As of now, Pascual said the SBMA seaport department is working on an inter-agency team-building workshop that would help smooth out coordination problems encountered in the handling of the drug smuggling case here last year.

The conduct of this workshop was also recommended by the House Committee on Dangerous Drugs, Pascual said. (SBMA Corporate Communications)

Read More

JICA study shows SBMA as most resilient IPA

Investment generation figures collated by a leading Japanese think tank have shown that the Subic Bay Metropolitan Authority (SBMA) is the only Investment Promotion agency (IPA) in the Philippines that turned out a positive output based on year-on-year figures in the first quarter.

According to the Nomura Research Institute (NRI), which prepared a study on the ongoing impact of the global financial crisis on foreign direct investment (FDI) in Asia, the Philippines is also reeling from a decrease in foreign investments due to the current economic slowdown.

However, the NRI study indicated that despite a generally negative record among IPAs in the Philippines, the SBMA, which manages the Subic Bay Free-Port Zone, has reported a 13.6-percent increase in committed investments based on year-on-year figures for the first quarter of 2009.

The NRI, which is reputedly Japan’s largest firm in consulting and system solutions services, prepared the study for the Japan International Cooperation Agency (Jica).

The study, the SBMA said in reaction, only indicated the “apparent resiliency of the Subic Bay Free Port as an investment location.”

According to the first version of the NRI report, which was dated June 2009, FDI commitments secured by the SBMA in the first quarter of 2009 totaled P1.5 billion.

Meanwhile, all of the other Philippine IPAs reported a year-on-year decrease in commitments for the same period, the NRI said.

These included the Board of Investments, which recorded a 57-percent decrease to P4.3 billion; the Philippine Economic Zone Authority (Peza), with a 50.8-percent decrease to P13.6 billion; and the Clark Development Corp., with a 72.5- percent decrease in commitment basis.

Documents gathered by the BusinessMirror showed the NRI prepared the report on FDI commitments in the Philippines for Jica in connection with a proposal for the development of the Philippine Investments Promotion Plan (PIPP).

The PIPP seeks, among others, the creation of an interagency body “to oversee the implementation and monitoring of all programs, activities and projects to improve investment climate” in the country.

The network of IPAs, including the SBMA, “is tasked with formulating and developing strategies to position the Philippines as among the prime investment destinations in Asia,” the NRI said.

In the same report, the NRI mentioned that FDI generation also fell in other Asian countries as a result of the global financial crisis.

These included Thailand, which posted a 26-percent decrease in capital commitments; Vietnam, with a 67-percent decrease in capital realization; India, with a 28-percent decrease in FDI realization; and even China, which suffered a 21-percent decrease in FDI realization.

However, the NRI particularly noted that the Philippines “has attracted far less FDI than its peer Asean countries.”

The SBMA, however, had somewhat bucked the downtrend in investment commitments when it signed up a total of 30 new projects worth P1.5 billion in the first quarter, bringing to 966 the total number of registered investors here.

SBMA Administrator Armand Arreza said the uptrend in Subic was due to a self-sustaining business environment created by the SBMA in Subic over the years “that was directed toward various industries that require less dependence on foreign markets.”

Arreza added Subic’s 2009 investment generation was recently boosted further by new investment pledges worth $86 million by South Korean shipbuilder Hanjin Heavy Industries & Construction Corp., a firm that has already set up a $1.7-shipyard in Subic.

Hanjin officials said the new investments would be for the production of ship components at the Subic facility and would be committed in two parts: $29 million starting September this year, and $57 million next year and onward. (Henry Empeño, Business Mirror Online)

Read More