Customs execs feud over Subic

Two Customs officials assigned to the Port of Subic are locked in a dispute over control of the issuance of gate passes for those bringing imported goods in or out of the free port.

The dispute erupted after Customs collector Marietta Zamoranos issued a special order removing from deputy collector Errol Albano the function of signing gate passes and issuing permits for temporary transfer of goods from the Subic free port.

Zamoranos designated a Customs personnel, Belma Limbaga, to perform the task that used to be Albano’s.

But Albano refused to heed Zamoranos’ order and sought the opinion of the Customs legal service department which ruled in his favor.

Invoking the legal department’s opinion, Albano issued a memorandum for Customs Commissioner Napoleon Morales to nullify Zamoranos’ order, which the deputy collector said violated Executive Order 127.

On May 22, Morales issued an endorsement letter ordering Zamoranos to strictly comply with the mandate of Executive Order 127 expressly vesting upon Albano, as the deputy collector for operations, the supervision over the release of cargos within the Subic Customs zone.

A week later, Morales reiterated his order for Zamoranos to comply and return to Albano the authority to issue gate passes. Morales also asked Zamoranos to submit her position paper on the issue.

But Zamoranos countered with a memorandum for Morales, stating that she “may not comply with the mandate of EO 127 as directed by the commissioner.”

But she explained that she was not disregarding the order of the commissioner and that she had valid and legal reasons not to comply with Morales’ directive.

The principal issue that was resolved by the legal service is the validity of Subic special order, which “does not automatically mean that the deputy collector of operations is the proper person to exercise the various functions,” Zamoranos said.

Zamoranos cited Administrative Order 296 issued in October 1996 which created the Customs clearance area and vested it with the function to issue gate passes inside the freeport zone.

Zamoranos said she would abide by the legal services department’s opinion as endorsed by Morales “but with respect only to the invalidity of the Subic special order pending submission and eventual resolution of our position paper to defend such orders.”

Zamoranos justified her action on Albano, saying that as a district collector, she is the executive officer of the port and has command responsibility over the effective discharge of the bureau’s mission in his jurisdiction such as collection of rightful duties and taxes, prevention of smuggling, and trade facilitation and promotion of a healthy business climate.

Zamoranos, in her memorandum for Morales, said that she would assume the role of “exclusive signatory” of all gate-passes and permit for temporary transfer of imported goods at the Subic free port.

On July 2, Zamoranos released another memorandum as “supplemental” to her earlier memo for the commissioner stating that AO 296 must prevail over EO 127.

“AO 296 is a latter issuance than EO 127,” Zamoranos said.

She further explained that EO 127 is a general law reorganizing the Finance Department and defining its duties and functions including the Bureau of Customs while AO 296 is a special issuance created specifically to meet the needs and requirements of the various economic and free port zones.

Last Friday, Albano positioned himself inside the gate pass issuance office but brokers opted to secure cargo passes directly from the office of Zamoranos who posted a memorandum directing all importers and exporters to have their gate passes processed in her office. (Cecille Garcia, Manila Standard Today)

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SBMA offers casino property to Korean firm

The Subic Bay Metropolitan Authority (SBMA) blockaded the hotels and a casino that a Hong Kong-based company is operating so it could offer the property to a Korean company that also wants to build a hotel and casino here, the firm’s liquidator said.

David Maund, a liquidator appointed by a Hong Kong court in 2006 to bring back Legend International Resorts Ltd. (LIRL) to profitability, told the Philippine Daily Inquirer in a phone interview from Hong Kong last week that the SBMA suddenly changed its approach in dealing with LIRL.

“[We learned that] the SBMA [was] paving the way for another group to take over [LIRL’s properties]. They blockaded the establishments to intimidate potential guests and users of the hotel,” Maund said.

The SBMA has offered LIRL’s properties to Neorex Philkor Inc., a Korean company that tried to build Ocean 9 hotel-casino at a tree park here last year, he said.

SBMA Administrator Armand Arreza confirmed that Neorex had been assigned LIRL’s properties. He said a lease contract with the Korean company had been approved by the SBMA.

“The assignment to another group is not the main issue. In fact, the liquidator has been trying to assign the property … for almost two years. Their repeated failure to honor their financial obligations with the SBMA and Pagcor (Philippine Amusement and Gaming Corp.) resulted in the termination of their lease,” Arreza said.

In 2006, Pagcor revoked LIRL’s gaming license when the company could not pay more than P1 billion it owed in the form of casino shares.

Eric Park, Neorex manager, said his company had “no clear plans for now.”

“Several sites were offered [by the SBMA], but each has its own issue to be considered carefully,” Park said.

Maund said the measures that SBMA officials were taking are “illegal.” He said that the company “agreed to the rehabilitation plan and there are still ongoing proceedings in Hong Kong. It is extremely regrettable that they are doing this.”

The SBMA barricaded LIRL establishments after the courts granted the SBMA’s motion to dismiss the rehabilitation proceedings and lift the stay order.

In an earlier interview, Arreza said the court ruling was executory.

“We saw that the rehabilitation proceeding was going nowhere, so we appealed to the court to end it, which the court did,” he said.

Arreza said the rehabilitation plan failed because “one of the premises of the corporate rehabilitation plan was having the gaming license from Pagcor.”

“Also, contrary to what LIRL had committed to under the corporate rehabilitation program, the company had given up its leases on other establishments it ran like Feng Huang Restaurant, Garden Units Hotel, Grand Seasons Hotel, and Neptune Club by the time we filed the motion to dismiss,” he said.

He said the SBMA had to move to protect the government’s interest.

“As far as we are concerned, the SBMA does not recognize the proceedings in Hong Kong,” he said.

But Maund said he represented all of LIRL’s creditors, both in the Philippines and abroad. “This includes the SBMA. My responsibility is to all of them,” he said.

He said the hedge fund Avenue and the firm Morgan Stanley have the largest shares of LIRL’s debt.

“They bought a massive amount of LIRL’s bank debts. What LIRL owes the SBMA is just a small fraction of the total debt of the company. The interests of the other creditors must not be prejudiced. All the creditors must be treated equally … unless there is a reason not to do so,” Maund said.

Asked whether LIRL would continue operating its establishments here, Maund said the firm was seeking an injunction against the SBMA to get it “operating profitably and without hindrances again.”

As for LIRL’s workers who may lose their jobs if the company goes under, Maund said: “[I am] concerned about their future. It depends on whether we can successfully resist what the SBMA is trying to do.”(Robert Gonzaga, Inquirer Central Luzon Desk)

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Theme parks expand facilities in Subic Freeport

In a bid to attract more business with better and more exciting product offerings, two popular theme parks in this free port are expanding their facilities and putting up new attractions.

According to Kenneth Rementilla, business and investment department manager for leisure of the Subic Bay Metropolitan Authority (SBMA), both the Ocean Adventure Marine Park and Jungle Joe’s World Amusement Park are constructing new leisure facilities to expand operations.

The new facilities in both parks are expected to be completed within the next few months, Rementilla said. “So after the rainy season, they’ll be expecting more visitors to both parks,” he added.

At the Ocean Adventure park, a bigger sea lion stadium and exhibit area are being built to provide “an even more delightful adventure for park guests of all ages,” said Timothy Desmond, chairman and CEO of the Subic Bay Marine Exploratorium Inc. (SBMEI), which operates the park.

“This new, larger stadium will feature an exciting water element of the show, where sea lions will frolic and perform in their saltwater habitat. The new exhibits area will include exciting underwater viewing opportunities as well,” Desmond said.

By September this year, Desmond added, two more new shows will open to the delight of visitors. These are the “Rap, Jump, and Roll”, a trampoline acrobat and mascot show that
will be presented at the new seaside stadium, and “Walk on the Wild Side”, a brand new show that will feature forest wildlife and presentations on jungle survival techniques by Aeta natives.

Desmond also said that the firm has recently opened “Adventure Beach”, which is a special events beach for group outings and team-building activities, and “Eco Theater”, which is a new venue for the Aeta presentations under the canopy of the Ilanin Forest in this free port.

“The new sea lion stadium project is evidence of our ongoing commitment to provide our guests with the very best in family entertainment,” Desmond said, adding that the SBMEI will also be doubling the size of its Camayan Beach Resort Hotel by July this year to meet customer demands.

Meanwhile, facilities expansion are now being made at Jungle Joe’s World, an amusement park built around bunkers where the U..S. Navy previously stored ammunition when it
still occupied the Subic naval base.

According to Rementilla, park operator Subic Familyland Inc. will be building an “Indiana Jones” zip line in the forest park, as well as a mini cable ride and a souvenir gift shop.

Because of these additional facilities, the company has announced a two-month suspension of its operations to make way for a major renovation, Rementilla added.

As of now, Jungle Joe’s World is attracting visitors because of its air-conditioned themed bunkers that have been converted into attractions like the Kiddie Playzone, Indy 500 Racer, Playhouse Theater, and Winter Wonderland.

Jungle Joe’s World also offers tours at its “Jurassic Trail” where life-size fiberglass figures of prehistoric animals are featured, an adventure zoo train ride, a state-of-the-art paintball course, and all-terrain vehicle (ATV) rides.

The firm is also planning to put up a unique floating restaurant at the Sa’anaba beach area of the 60-hectare property. (SBMA Corporate Communications)

PHOTO: Dolphins wow visitors at the Ocean Adventure marine park in the Subic Bay Freeport.

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Hanjin delays order for 8 ships to save $1.3-B deal

An order for eight super post-panamax boxships was delayed by South Korean shipbuilding conglomerate Hanjin Heavy Industries and Constructions (HHIC) here inside this premier Freeport, as the company tries to save a mega-deal worth $1.3 billion from being cancelled.

Around eight 12,800 TEU (20-foot equivalent unit) ships were ordered in 2007 by Hamburg-based NSC Schiffahrtsgesellschaft and KG financier Lloyd Fonds at the Hanjin shipbuilding facility in Redondo Peninsula here in Subic.

The order was scheduled for completion between 2010 to 2011, but Hanjin’s publicly announced on its website that the ships would be completed between 2010 to 2014.

But according to a news report, the decision by Hanjin to postpone the delivery of the vessels was done without any knowledge from NSC and Lloyd Fonds.

According to Lloyd Fonds’ CEO Torsten Teichert, “The delay has not been arranged by a joint agreement with Hanjin. We informed Hanjin that there is no financing in place of four of the ships and that these vessels have no charter contracts.”

Hanjin Heavy Industries disclosed in a statement that it was in talks that changed contract terms, including rescheduled delivery positions, for several projects.

Until now, they have not made any public statements of any agreements between the two companies.

Hanjin also confirmed that Belgian shipping company Delphis has asked the company to replace the order of some four 3,400 TEU vessels into three cape-size bulkers.

NSC and Lloyd Fonds have already sold two of the vessels on order to French line CMA CGM, planned for delivery in May and September 2010, but they are now likely to be postponed for a year. The carrier also chartered two vessels for 12 years at a daily rate of about $59,000.

The remaining four ships that do not have any charter contracts were scheduled for delivery between May and December 2011, but the shipbuilding company has announced the completion date of the four remaining vessels between 2012 and 2014.

The state of the four vessels are in currently in limbo as to whether or not they will be built, as the probability of cancellation looms the four vessels due to the contract terms.

Hanjin agreed on a very low first installment of some $5 million per vessel, with every order made by one-ship companies wherein Lloyd Fonds and NSC are shareholders.

One-ship companies would not be able to pay the subsequent installments by themselves as no bank financing is involved. No further guarantees were given by Lloyd Fonds and NSC, meaning that they would each suffer a maximum loss of $2.5 million per vessel if the order would be cancelled.

Shipbuilding companies would usually insist on an initial installment to cover 20% of the purchase price plus a bank guarantee to cover an additional 20% when doing business with one-ship companies.

Shipping experts were skeptical whether Hanjin’s move would save the order, adding that the ships will actually be constructed but not as planned. (Jonas Reyes, Manila Bulletin)

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SBMA’s 1st half seaport revenue exceeds 12-month figure in 2008

Authorities here reported on Monday that total revenue generated by the Subic Bay Metropolitan Authority (SBMA) from seaport operations in the first six months this year have already exceeded the total 12-month income in 2008.

“This is a result of the efforts by the SBMA to aggressively market the Subic port and to attract more shippers, importers, brokers and forwarders to Subic,“ said SBMA senior deputy administrator for operations Ferdinand Hernandez.

Hernandez said Subic seaport’s six-month revenue rose to P276.49 million this year, thus surpassing last year’s 12-month record of P276.24 by 0.09 percent or P244,153.

According to the SBMA Seaport Department, Subic’s seaport has consistently shown an upward trend since 2005, with a 5.41 percent growth recorded in 2006; 14.29 percent in 2007; and 26.63 percent in 2008.

“Now, we are confident that at the rate we’re going, our figure at the end of this year may even be double that of last year,” Hernandez said.

In the month of June alone, the SBMA Seaport Department recorded an income of P60.69 million, the highest monthly revenue ever recorded in the last five years..

The Subic seaport also earlier posted record-breaking monthly revenues this year: P37.62 million in January, P41.57 million in February, P51.01 million in March, P44.49 million in April, and P41.07 million in May.

The SBMA said seaport revenues were derived from vessel and cargo charges, leases or rentals, processing fees, SBMA shares from joint ventures, and other billings for port users.

For the first semester of this year, the bulk of seaport revenue came from vessel charges, totalling P112.11 million.

According to Hernandez the SBMA Seaport Department has pegged its revenue forecast for 2009 at P316.3 million.

“This means that our current first-half figure of more than P276 million is already 87.41 percent of our P316.3-million goal for this year,” Hernandez stressed.

“Hopefully, we will exceed our target at the end of the year,” he added.

SBMA seaport manager Perfecto Pascual said that the SBMA’s goal-setting program has so far worked wonders for the seaport department.

He said that when his department first made a revenue forecast in 2006, seaport income rose significantly when they achieved 94.75 percent of its P201.46-million forecast. This was followed by a 93.54-percent completion of the P233.21-million forecast in 2007, and the chart-busting record of 121.05-percent in 2008 when Subic posted an actual revenue of P276.24-million against a forecast of P228.2 million.

Hernandez said that among the factors that largely contributed to this year’s unprecedented revenue collection were the operation of Subic’s New Container Terminal 1 (NCT-1) by the Subic Bay International Terminal Corp. (SBITC), income from vessel lay-ups, as well as wharfage fee for petroleum products, fertilizer, and grains like soya and wheat.

Hernandez also attributed Subic’s growing seaport income to the government’s complementary program on infrastructure development.

“All these record-breaking figures are because of President Gloria Macapagal-Arroyo’s vision for Subic and the huge investments in infrastructure like the Subic-Clark-Tarlac Expressway (SCTEx), the North Luzon Expressway (NLEx), and the Subic Port Development. All together, these have greatly enhanced Subic’s performance as a logistics hub,” Hernandez added. (SBMA Corporate Communications)

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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)

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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.

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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.

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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)

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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)

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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)

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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)

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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)

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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)

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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)

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