Subic Freeport workers now 81,700

Expansion programs by existing companies in Subic, as well as the entry of new business locators, has resulted in the continuing rise of employment here, with the active workforce augmented by more than a thousand workers each month since January this year.

According to figures from the Subic Bay Metropolitan Authority (SBMA), the active workforce in Subic stood at a total of 81,729 as of August this year.

This represented an increase of 11,321 new hires over the yearend 2007 figure of 70,408.

SBMA Administrator Armand Arreza said most of the new positions were created by companies expanding their operations.

"More jobs are about to be created in the coming months as we step up efforts to sign in more businesses and to coordinate job-skills matching with our locators," he said.

Arreza added that in the first eight months of this year, the SBMA has approved 130 new investment projects that will create a total of 5,177 new jobs.

SBMA data indicated that of the total 81,729 workers employed in the Subic Freeport, majority come from Olongapo City, which contributed a total 32,241, or 39.45%.

The second biggest number of Subic workers are those from Zambales, with 17,794 or 21.77%, followed by Bataan, with 10,803 or 13.22%; the National Capital Region, with 4,421 or 5.41%; Pampanga, 2,837 or 3.47%; Tarlac, 1,153 or 1.41%; and other areas, 12,480 or 15.27%.

Arreza said the SBMA's job creation initiatives will also receive a boost from an Internet-based job-skills matching program launched here on Friday by WOWCard, Inc., a business locator that conducted the first Internet-assisted job fair to be held here on September 26 to 27.

The project, Arreza added, will further strengthen job creation efforts for Central Luzon workers, and help address both unemployment and underemployment in the region.

WOWCard president Victorino Quiton said, meanwhile, that the Internet-based system dubbed as "Job@8s" will utilize an electronic database whereby investors and business locators in Subic could post job announcements and hiring requirements.

"This will make the whole recruitment and hiring process faster, more efficient and easier," he said.

Quiton explained that job-seekers availing of "Job@8s" services will be asked to list their qualifications and desired positions.

These will then be encoded and matched with available positions as listed by the more than 30 investor firms that have confirmed their participation in the job fair.

"This facility will also provide locators the window to hire highly qualified professionals even from outside the country, and, at the same time, is expected to attract more foreign investors when they learn that the recruitment and hiring process in Subic is less of a problem," Quiton added.

Quiton said the "Job@8s" facility will be made available for free to local job applicants even after the job fair. (SBMA Corporate Communications)

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Internet-based job fair set in Subic on Sept. 26-27

Job applicants take note: Landing a job at the Subic Bay Freeport will now be faster and easier with the use of Internet technology.

WOWCard, Inc., a Subic-registered company engaged in advertising, will conduct on September 26 to 27 the first Internet-based job fair in this free port at the Subic Bay Exhibition and Convention Center (SBECC).

The event, which will be undertaken in partnership with the Subic Bay Metropolitan Authority (SBMA), will also launch WOWCard's job-matching facility that will utilize advanced information and communications technology (ICT) for optimum job-skills matching.

"This will be the first job fair in the Subic Bay Freeport wherein job-seekers could go through the entire process of application and hiring in just one day," SBMA Administrator Armand Arreza said.

"This Internet-based job-matching facility developed by WOWCard will not only make it easier for job applicants, it will also be available for free," he added.

According to WOWCard president Victorino Quiton, the job-matching facility dubbed as "Job@8s" will utilize an electronic database whereby investors and business locators in Subic could post job announcements and hiring requirements.

"This will make the whole recruitment and hiring process faster, more efficient and easier," Quiton enthused.

He explained that in the coming job fair, job-seekers will be asked to list their qualifications and desired positions, which will then be encoded and matched with available positions as listed by the more than 30 investor firms that have confirmed their participation in the event.

"This facility will also provide locators the window to hire highly qualified professionals even from outside the country, and, at the same time, is expected to attract more foreign investors when they learn that the recruitment and hiring process in Subic is less of a problem," Quiton added.

Aside from being the first Internet-based job fair, the coming event will also set the standards for future job fairs, Quiton disclosed, because of exhibits and entertainment that will be put up at the 5,000-capacity convention center.

He said that there will be some 50 booths for exhibits, aside from food booths to be set up at the front parking area of the SBECC, and transportation to and from the venue will also be provided.

"And while job-seekers wait in line for their application, video and live band, as well as raffle of prizes donated by locator-sponsors, will provide the sidelights of the event," Quiton said.

He also stressed that WOWCard will provide the Job@8s job assistance program even after the job fair, and it will be a free service.

The project, Arreza meanwhile said, is seen to further strengthen job creation efforts for Central Luzon workers, and also address both unemployment and underemployment in the region.

As of August, data Department of Labor and Employment's Bureau of Labor and Employment Statistics indicate that Central Luzon ranks third among the 17 regions in unemployment rate with 10 percent, and 17th in underemployment rate with 8.3 percent.

Since its establishment as a free port in 1992, Subic has helped create livelihood opportunities not only for local investors, but also to workers from Central Luzon and nearby regions, Arreza said.

The Subic Bay Freeport now employs a total of 81,729 workers, most of them from Olongapo City, which now has an employment share of 39.45%. The rest comes from Zambales, 21.77%; Bataan, 13.22%; National Capital Region, 5.41%; Pampanga, 3.47%; Tarlac, 1.41%; and other areas, 15.27%. (SBMA Corporate Communications)

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Koreans top new Subic investors with $198.8-M

South Korean companies pledged some $198.8 million in new investments here in the first eight months of the year, making them the top-ranking group of new investors for the past three years.

The South Korean firms, with a total of 46 projects approved by the Subic Bay Metropolitan Authority (SBMA) from January to August, committed more than 85% of the $232.6 million worth of new investments for the said period.

Filipino investors, meanwhile, came in second with 67 projects worth $10 million, followed by Taiwanese firms with three projects worth $2.9 million, and Malaysians, with another three proposals amounting to $2 million.

SBMA Administrator Armand Arreza said the influx of Korean investors here came in the wake of the $1.6-billion investment infused by shipbuilder Hanjin Heavy Industries Corp.-Philippines in 2006 and 2007.

“Most of these Korean companies are either suppliers or subcontractors of Hanjin, and some are property developers that also target the growing Korean community not only in Subic, but in other parts of the country,” Arreza revealed.

“Subic’s biggest new investor so far this year, the Subic Neocove Corp., is also a Korean company which intends to develop a resort to cater mostly to Korean expatriates,” he added.

“Of course, Subic has a good mix of nationalities, who have been part of the local business community since the free port was established in 1992,” Arreza said.

Among the nationalities that put up new investments here this year are the Taiwanese, Japanese, American, Malaysian, Pakistan, Norwegian, Australian, British, Singaporean and Canadian.

SBMA records also indicate that in January to August this year, foreign direct investments (FDIs) composed the bulk of fresh capital infusions in Subic with a total of $208.8 million.

In the same period, the SBMA had approved a total of 130 projects, with projected employment totaling 5,177.

These increased the number of approved projects in the Subic Bay Freeport to 1,103, with committed investments totaling $5.73 billion.

Arreza said that for the past three years, Korean firms had topped other nationalities in terms of value of new investment projects.

In 2006, Korean companies put up a total of $1.36 billion, followed by Filipinos with $57 million, and Taiwanese with $9.8 million.

Last year, Koreans were again on the number one rank with $993 million worth of investments, followed by Filipinos with $355 million, and Taiwanese with $222 million.(SBMA Corporate Communications)

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Subic revenues hit P3.55-B in first 8 months

Revenue collections in this free port amounted to more than P3.55 billion in the first eight months of the year, boosted by positive growth in cash receipts by both the Bureau of Customs (BoC) and the Bureau of Internal Revenue (BIR).

Figures released by the Subic Bay Metropolitan Authority (SBMA) indicated that the two collection agencies here posted a combined increase of more than P251 million, or 7.61% over last year’s January to August revenue total of P3.3 billion.

The surge in tax and duties collection started in June this year, when a positive variance of 40.05% was recorded, followed by increases of 12.27% and 8.36%, respectively, in the next two months.

SBMA Administrator Armand Arreza said the positive tally is “reflective of the growth in business operations” by the more than 1,100 investor firms in the Subic Bay Freeport, as well as the increasing number of port users.

“The growing number of business locators in Subic also contributed to the growth in income taxes collected from Freeport employees, which now number to almost 82,000,” he said.

He added that in just the first eight months alone, the active workforce in the Subic Freeport rose by 11,321 from 70,408 at the end of 2007.

According to figures submitted by the BoC to the SBMA, the bureau’s cash receipts this year totaled P2,539,272,857.53 as of August, representing an increase of 8.11% over the P2,348,694,404.81 posted in the same period last year.

The overall growth was attained despite negative month-on-month variances posted in March, with –13.7%, and May, with –21.63%.

The highest monthly total in the eight-month period was recorded in July when BoC collected P393,074,394.64, followed by P367,591,192.46 in June, and P335,330,989.39 in August.

Meanwhile, non-cash revenues by the BoC, which are not included in the total cash receipts, amounted to P3.54 billion in the first eight months. This figure represented a percentage increase of 118.48 over the 2007 total of P1.58 billion.

As for the BIR, its income tax collections rose by 6.35% in January to August 2008, compared to its 2007 performance.

The BIR said it collected a total of P1,014,153,609.10 this year, compared to P953,566,367.74 in January to August 2007.

The bureau’s biggest tax haul was made in April when collections reached
P210,080,661.86.

The agency also posted a 61.8% month-on-month increase in March and 24.36% in August, despite negative variances in January (-28.83%) and February (-33.01%). (SBMA Corporate Communications)

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Pres. Arroyo to confer ‘Pagasa’ awards to top civil servants

President Gloria Macapagal-Arroyo will confer on Friday the “Pagasa” award to the country’s most outstanding civil servants, including a security officer here who was recognized for initiating innovative programs for the Subic Bay Metropolitan Authority’s law enforcement department.

Set to receive the Pagasa award under the individual category is SBMA Security Officer III Joel Viray, who was the first SBMA employee of the year awardee in 2006.

The awarding will be held at Malacañang’s Rizal Hall in commemoration of the 108th anniversary of Philippine Civil Service, said Civil Service Commission (CSC) chairman Ricardo Saludo in an announcement sent recently to the SBMA.

Viray will join five other individual awardees, among them a college president and two municipal mayors, who bested other regional finalists in the nationwide CSC search.

Saludo said the Pagasa award is conferred to individuals and groups for outstanding contributions resulting from an idea or performance that directly benefited more than one department of the government.

Six other Pagasa awardees under the group category will also be recognized during the Malacañang ceremony, along with winners in two other award categories: the “Lingkod Bayan” award, which is given for achievements with national impact on public interest, security and patrimony; and the “Dangal ng Bayan” award, for extraordinary acts and exemplary ethical behavior in public service.

Viray was earlier recognized, along with other Central Luzon finalists, by Saludo and CSC Region III director Karin Litz Zerna during an awards ceremony held at the King’s Royal Resort in Bacolor, Pampanga.

According to the CSC, the SBMA security officer earned the Pagasa award for his “dynamism and dedication in his work, which led to the improvement of security systems and processes” in the Subic Bay Freeport.

Viray’s innovations enhanced the operational efficiency of the SBMA Law Enforcement Department by streamlining the accreditation program for security officers, thus generating savings worth P1.2 million, the CSC citation added.

Along with Viray, the 2008 Pagasa awardees in the individual category are: Aleli C. Almodovar, general manager of the Isabela City Water District in Basilan, who was recognized for resurrecting a moribund company into a profitable utility; Dr. Philip B. Ibarra, president of the Tarlac College of Agriculture in Camiling, Tarlac, for his masterful stewardship of the college’s human capital; Froilan C. Roque, refinery officer IV of Bangko Sentral ng Pilipinas in Quezon city, for innovativeness and ingenuity in the workplace; Mayor Noel R. Rosal of Legazpi City, Albay, for leading and inspiring his constituents in rebuilding the city that was devastated by typhoons in 2007; and Mayor Roque S. Verzosa Jr. of Tagudin, Ilocos Sur, for successfully implementing a blueprint for development.

Winners in the Pagasa group category, meanwhile, are: the Department of Agriculture-Cagayan Valley Integrated Agricultural Research Center’s Crop Improvement Group; Ilocos Norte Water District; the Pag-Ibig Fund branch in Butuan City, Agusan del Norte; the Tarlac College of Agriculture’s group for Promoting Commercialization of Sweet Potato-Clean Planting Materials; the “Buwis Balikatan sa Barangay” group of the Bulacan government’s Provincial Asessment and Treasury Office; and the UPLB Bee Program of the University of the Philippines at Los Baños. (SBMA Corporate Communications)

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UIG claim of P1-B investment disputed

Officials of the Subic Bay Metropolitan Authority (SBMA) have disputed claims by the Universal International Group (UIG) that it has invested P1 billion to develop the golf course facility in this free port.

Pointing out that UIG was booted out of the facility precisely for its failure to introduce developments in the former US military golf links, the SBMA questioned where the supposed P1 billion investment went.

"We believe that the claim cannot be substantiated because we have yet to see the clubhouse, or the condo, or the villas that the UIG had promised in 1995," SBMA Administrator Armand Arreza said.

"As you can see, despite the UIG having operated the facility for more than 10 years, nothing much has changed. The property is still fenced off with barbed wire until now," he added.

Arreza said that UIG president Jack Ho apparently bloated his firm's capital exposure when he made his case for the company during a House committee hearing recently.

Ho said the P1 billion represented "an accumulation of so many investments, of operating expenses," with around P900 million going to improvements alone.

He claimed further that because of UIG's development, the golf course was assessed by a private appraisal firm in 2001 to be worth P1.3 billion.

SBMA officials, however, have pointed out that the UIG has not delivered on its commitments under its lease development agreement (LDA) with the agency.

The first development phase includes the rehabilitation of the golf course to world-class standards by 2001, the construction of two tee houses by 2002, a full service halfway house by 2003, as well as the establishment of a fishing area, an orchid garden and a handicraft center.

The SBMA said there was only partial compliance on these requirements, while the orchid garden and handicraft center have not yet been constructed.

The second and third phases would have seen the construction of a 100-room condominium and 80 villas by 2006, while the fourth phase would have the completion of a 400-room resort/casino hotel by 2011.

These commitments, however, have not been realized, the SBMA said.

Along with UIG's unpaid debts to the SBMA amounting to $44,070 in dollar account and more than P25 million in peso account, the unfulfilled development commitments had forced the agency to take over operations in May last year.

The dearth of improvements at the Subic golf course, meanwhile, has led irate members of the UIG-controlled Subic Bay Golf and Country Club to sign last June 15 a manifesto expressing support to the SBMA and "elation" over its takeover of the facility.

According to records, the SBGCC has close to 500 members who paid fees equivalent to P200,000 per share.

The paid-up membership fees, dues, and other income collected from the golf course operation, may have been the sole source of funds that the UIG had used for what little development the firm has introduced into the facility, club members also suspected.

Other members rued that the club shares they paid for turned out to be only "playing rights" because UIG has not delivered on the full-blown country club amenities that it has promised earlier. (SBMA Corporate Communications)

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Subic golf course contract not a ‘sweetheart deal’

The Subic Bay Metropolitan Authority (SBMA) has vehemently denied allegations that it has entered into a “sweetheart deal” with Hanafil Golf and Tour, Inc., a Korean-Filipino firm that is set to pour $48 million to redevelop the Subic Bay golf course.

SBMA Administrator Armand Arreza stressed that the agency had observed due process in awarding the contract to Hanafil, in accordance with RA 9184, otherwise known as the Government Procurement Reform Act.

“How could it be a sweetheart deal when, clearly, our agreement with Hanafil assures the government a P14-million income annually compared to the P3.6-million promised by the former operator?” Arreza asked.

“And this P14-million rental will be paid on top of a five percent revenue sharing scheme, as well as the $48 million development commitment,” he said.

Arreza also explained that the SBMA awarded the lease and development contract to Hanafil because the firm offered terms “most advantageous to the government” among the eight proposals received by the SBMA’s Bids and Awards Committee (BAC) for infrastructure.

“All these underwent the legal process — from the publication of an invitation to submit comparative proposals, to the creation of an oversight committee composed of SBMA directors and managers to oversee the bidding process,” Arreza said.

“So there is simply no substance to this sweetheart deal angle foisted by some detractors who seem to relish the idea of reverting to the previous contract that didn’t work out,” he added.

Arreza clarified these points in reaction to claims by Northern Samar Rep. Emil Ong that the terms and conditions of the Hanafil contract were “grossly disadvantageous to the government” because unlike the Universal International Group (UIG), the former operator, Hanafil was given a one-year grace period from payment of rentals to allow the new operator to develop the golf course.

Arreza said, however, that the SBMA has given the UIG “more than enough concessions already” to enable it to make good on its development commitments that were agreed upon as early as 1995.

Among UIG’s commitments were the construction of a first-class clubhouse, a five-star hotel and resort, a condominium and VIP villas targeted for completion before Subic hosted the Asia-Pacific Economic Cooperation summit in 1996.

Arreza said that the SBMA had allowed the UIG’s original lease and development agreement (LDA) to be amended three times, with the first amendment in 2001 effectively reducing the UIG’s rental fees, performance bond and service fees, and extending the firm’s compliance period for its commitments.

However, by January 2003, the UIG still accumulated $44,070 and more than P25 million in arrears, and also failed to deliver on its promises.

The second amendment in 2003 stopped the imposition of service fees altogether and waived future interest on fixed service fees, while the third, in 2004, reduced UIG’s lease rate by 50% and deferred the imposition of escalation rates.

Despite these, Arreza said the UIG continued to default on its obligations under the LDA and under the compromise agreements, so that by the end of March 2007 the firm’s arrears had ballooned to more than $2.55 million and P47.73 million.

“The firm’s failure to settle its debts and to fulfill its development commitments forced the SBMA to terminate UIG’s LDA in May last year in order to protect the interest of the government,” said Arreza. (SBMA Corporate Communications)

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SBMA to invest P160M in WiMax security network

The Subic Bay Metropolitan Authority (SBMA) is investing about P160 million to build a security net powered by the rising star of wireless communications -- WiMax (Worldwide Interoperability for Microwave Access) technology.

SBMA Administrator and CEO Armand Arreza said the government development arm is planning to acquire security cameras and install WiMax equipment all over Subic to connect these.

Arreza said that SBMA picked WiMax over other technologies because it is most suited to Subic's mountainous terrain.

"From the airport to the central area, where we have our office, the distance is longer than Quezon City to Makati," he said, adding that it would be better to use WiMax.

"We will be the one to make an investment on the infrastructure and then we will look for an operator to run it. Our primary goal is to have a wireless security network so we will not need all the bandwidth available. The operator can offer other services, including video streaming, and so on."

Arreza added that SBMA will finalize plans before yearend so that the WiMax network can be deployed next year. (Riza T. Olchondra - Philippine Daily Inquirer)

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Hanjin to improve safety in its Philippine shipyard

Shipbuilder Hanjin Heavy Industries Construction (HHIC) is to improve safety after the deaths of 15 workers at its Philippines shipyard in three years, an official said.

The news comes as the South Korean-based company enters into a contract to build two supertankers at the shipyard in the former US naval base at Subic Bay just north of Manila.

Subic Bay Metropolitan Authority (SBMA) administrator Armand Arreza said Hanjin was working to improve safety standards, adding that the workers had died in accidents since construction of the shipyard began in May 2005.

Arreza said the rise of the shipyard, which he compared to an entire town, had been
swift. The shipyard which Hanjin says is the biggest in the world, covers 354 hectares (875 acres).

"This has been a challenge to us. Hanjin went from having zero employees in May 2005, when they began building the shipyard, to 20,000 employees this year," he added.

He said both Hanjin and the workers had to "comply with the culture of safety we
seek to inculcate into all locators at the SBMA.

"He added: "Many construction site mishaps are the result of the construction workers
not wearing their safety gear and we want to change that mindset."

Pyeung Jung Yu, the head of Hanjin's business department in Subic, said the shipyard had signed a contract to build two Very Large Crude Carriers (VLCCs) for 330 million dollars for Emarat Maritime LLC of the United Arab Emirates.

The 320,000-tonne, double-hulled vessels will be 333 metres (1,098 feet) long, 60 metres wide and 30.5 metres tall with a top speed of up to 16 knots.The tankers are expected to be delivered in 2011 and will be a first for Hanjin, which did not have
the space at its South Korea shipyards.

"We simply don't have the space in South Korea so it is only here in Subic that we can build these huge carriers," Yu said.

Hanjin' s Subic shipyard delivered its first ship, the 41,000-tonne container carrier MV Argolikos in July, and launched its second vessel, the CMA CGM Turquoise a month later. It also has contracts for bulk carriers with companies based in Hong Kong and Germany. (AFP)

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Hanjin's Subic Bay shipyard building 2 supertankers

South Korean shipbuilder Hanjin Heavy Industries & Construction (HHIC) will be building two units of Very Large Crude Carrier (VLCC) worth a total of $330 million at its shipyard in Subic Bay Freeport.

According to a company statement received by the Subic Bay Metropolitan Authority (SBMA), Hanjin has entered into a contract to construct two large carriers for Emarat Maritime LLC (EML) of the United Arab Emirates.

The deal was signed on September 3 by EML president Jitendra Misra and HHIC president Kyu-Won Park on behalf of HHIC-Phil, the company's construction arm based in Subic.

The construction of VLCCs will be the first for Hanjin, which has not been able to participate in large vessel production in the past due to limited space at its Yeongdo shipyard in Korea.

"With the completion of the Subic Shipyard, we're now able to build very large vessels," the HHIC statement said."From now on, we're going to focus on high value-added vessels and strengthen our competitiveness through improvement of productivity and technical development based on close cooperation between Yeongdo Shipyard and Subic Shipyard," the HHIC added.

SBMA Administrator Armand Arreza said Hanjin's VLCC contract would accelerate Subic's recognition as a global player in the shipbuilding industry, as well as increase the freeport's job creation and export production thrusts.

"This is no small feat for Subic, considering that it has just recently shifted its focus to its maritime trade potentials. Now, the Subic Bay Freeport, as well as
the Philippines, is gaining popularity for its capability to produce world-class ships," Arreza added.

According to Hanjin, the first VLCCs to be built in Subic are expected to be delivered in June 2011.The 320,000-ton vessels will be 333 meters long, 60 meters wide and 30.5 meters deep, with speed of up to 16 knots. The vessels will be
double-hulled in compliance with maritime industry standards.

Hanjin officials said that with the "revolutionary progress" of VLCC construction in Subic, the company has received high praises from the industry.

The firm's Subic shipyard delivered its first ship, the 41,000-ton container carrier MV Argolikos last July, and launched its second vessel, the CMA CGM Turquoise a month later. Hanjin said it also recently won a total of $630 million shipbuilding deals in a row, including those for a capesize bulk carrier for Sealink Shipping of
Hong Kong on August 27, and two bulk carriers for MPC Steamship of Germany on August 27. (Malou Dungog)

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To meet investment goal, SBMA wants IT parks in Subic

The Subic Bay Metropolitan Authority, aiming to attract a total of $7.5 billion in investments by 2010, is promoting development of information technology (IT) parks in the Subic Bay Freeport, northwest of Manila, SBMA administrator and chief executive Armand Arreza said.

"So far, investments in the free port have reached $5.7 billion, he said. In the first half of 2008, Subic attracted $212 million in investment pledges," he added.

"Subic's port, shipyard and logistics facilities are well known but Subic is not yet known as an IT hub," Arreza said. "It would be very good for us to also establish presence in this area."

Arreza said the SBMA was negotiating with a Taiwanese group and a Dubai-based group that could each develop an IT park in Subic.

"The Taiwanese group is more interested in digital content and biotechnology, while the Dubai group is considering developing space for outsourcing companies, maybe call centers," he said.

The two IT parks would entail about $40 million in investments, of which about $15 million would go to land development, he said.

About 19 hectares of land has been allocated for IT park development at Subic, he said.

The SBMA will host an ICT forum in November, he added. (Riza T. Olchondra - Philippine Daily Inquirer)

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Hanafil golf deal ‘most advantageous’ to the gov’t

The awarding of a contract to develop the Subic Bay golf course to Korean-Filipino firm Hanafil Golf & Tour, Inc. is by far the most advantageous proposal for the government, the Subic Bay Metropolitan Authority (SBMA) said.

Reacting to allegations by Northern Samar Rep. Emil Ong that the terms of the lease given to Hanafil were “disadvantageous to the government”, SBMA Administrator Armand Arreza clarified that Hanafil won the open bidding for the golf course project “precisely because it gave the most generous offer.”

“Anyone, including Mr. Ong, can see for himself that Hanafil’s contract provisions are miles away in comparison with the old terms,” Arreza asserted.

He explained that while the former operator UIG International Development Corp. offered a rental of only P300,000 per month, or a total of P3.6 million in one year, Hanafil has offered $350,000, which translates to more than P14 million annually.

Aside from rental fees, Hanafil has also offered the SBMA a 5 percent gross revenue sharing and development commitments worth $48 million to be implemented within six years.

“Given these commitments by Hanafil, the P3.6 million annual income under the old contract that the honorable congressman seems to want to maintain simply doesn’t measure up,” Arreza said.

Arreza said the issue on the operation of the Subic golf course has been a “recurring theme” among some legislators like Ong ever since the SBMA terminated the UIG’s lease development agreement (LDA) last year due to ballooning debts amounting to $150 million.

He said Hanafil won over seven other companies in a bidding held last March that required proponents to deposit in an SBMA bank $3 million in initial development funds, as well as advance $400,000 in rentals to the SBMA treasury.

The bidding process was duly reviewed by an oversight committee composed of members of the SBMA board of directors and other officials of the agency.


As to the UIG, which is lobbying to repossess the golf course, Arreza said the SBMA “can no longer continue having false hopes with a repeat offender,” pointing out further that the SBMA takeover of the golf course last year and in 1997 had been affirmed respectively by the Regional Trial Court in Olongapo City and the Supreme Court.

“It’s precisely because the government was losing money from the continued operation of UIG that the SBMA took over the operations twice,” Arreza said.

“The SBMA has given the former operator enough concessions,” Arreza said.

However, the Taiwanese firm had “utterly failed to honor its development commitments made as early as 1995,” he added. These included the construction of a first-class clubhouse, a five-star hotel and resort, a condominium and VIP villas.

Ong had also asked the House committee on oversight to investigate SBMA’s awarding of the golf course lease to Hanafil, purportedly because the firm is headed by Benjamin John Defensor III, reportedly a nephew of pro-administration senator Miriam Defensor-Santiago.

Ong has also raised the possibility that Defensor “is just fronting for South Korean investors” since he reportedly holds less than one percent of the shares, while his Korean partners own 87 percent of the company.

That issue, Arreza said however, “is just water under the bridge.”

“What matters to us is the capability of the company to deliver — and we believe that Hanafil has that capability,” he added. (SBMA Corporate Communications)

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"5th Freedom Rights"eyed for Kuwait in Subic-Clark Freeports

The Philippines and Kuwait have begun bilateral talks on liberalized civil aviation
policies that would entitle designated airlines of both countries to operate from the free ports of Subic or Clark to any point in Kuwait and vice versa.

Subic Bay Metropolitan Authority (SBMA) Administrator Armand Arreza said the broad terms of discussions included provisions for “Fifth freedom rights” that essentially allows an airline to carry passengers from intermediate points between the two contracting countries.

“This will be a big shot in the arm to both the local aviation and tourism industry,” Arreza said on Thursday, pointing out that airports in both Subic and Clark could accommodate passenger and cargo flights.“The Diosdado Macapagal International Airport [DMIA] in Clark would probably benefit the most because it’s already established as a commercial airport, but our own Subic Bay International Airport [SBIA] could still play catchup,” Arreza added.

Arreza said the initial round of discussions for the prospective Kuwait-Clark/ Subic routes was concluded during the visit to the country of Kuwait’s Prime Minister
Sheik Nasser al-Mohamed al-Alhmed al-Jabber al-Sabah from August 14 to 16.

Secretary Edgardo Pamintuan, chairman of the Subic-Clark Alliance for Development Council, and Fawaz Alfarah, president of the Kuwait Civil Aviation, signed the record of discussion on August 15.

A copy of the record of discussion showed that the two parties agreed to specifically entitle designated airlines of both countries to operate air services from Clark/Subic to any point in Kuwait, and from any point in Kuwait to Clark/Subic, “with any number of frequencies and with any type of aircraft.”

The two parties also agreed that such air services along these routes “shall enjoy unlimited frequencies with Fifth freedom traffic rights both for passenger and cargo flights.”

The Fifth freedom rights as discussed, however, specifically provided that any point in the United States “shall not be served as an intermediate or beyond point of destination.”

The discussion also provided that Kuwait shall grant designated Filipino airlines serving the Kuwait-Clark/ Subic routes a 10-percent discount on fuel and 15-percent
discount on ground-handling services.Arreza said formal negotiations for these agreed-upon items are expected to be held soon between the respective civil-aviation authorities of the two countries.

Once the agreement is sealed, the SBMA “expects to better market Subic as a destination for international tourists, as well as a logistics hub,” he added.

While Clark has lately attracted several airlines flying international routes, the Subic airport has been used mostly for domestic flights and logistics operations by FedEx.

SBMA records indicate that from January to July 2008, a total of 57,998 domestic
aircraft and 6,840 FedEx flights used the SBIA.The Subic airport, which has a 10,000-sq-m passenger terminal and is equipped with an upgraded instrument landing system, now serves as a secondary airport and a main diversion airport of the Ninoy Aquino International Airport in Manila. It can accommodate as many as 41 passenger planes at a time, including wide-bodied aircraft like Airbus A340-200s and Boeing 747-400s, SBMA airport officials said.

Arreza said the SBIA could expect more international passengers once the Kuwait-Subic route is established.(Henry Empeno/Business Mirror)

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Taiwanese in Subic are Happy

Taiwanese investors here “are very happy” that government efforts to harmonize customs systems and procedures with the free ports of Subic and Clark are helping advance trade relations between Manila and Taipei.

Subic Bay Metropolitan Authority (SBMA) Administrator Armand Arreza said the recent automation of cargo clearance and releasing facilities in the free ports ironed out kinks in the flow of trade and investments from the island economy.

“Now, we will have an environment where investors can see that their goods are being handled on time and processed in a transparent manner,” Arreza said. “Our locators, particularly the Taiwanese firms, believe that through the harmonized immigration, customs and quarantine program, doing business in Subic and Clark will truly be at par with world-class standards,” he added.

The SBMA and the Clark Development Corp. (CDC) signed a memorandum of agreement (MOA) on the harmonized customs system last week, along with the Subic-Clark Alliance for Development Council (SCADC) and the Bureau of Customs (BOC).In particular, the agreement bound the signatories to formulate, coordinate, implement and monitor an automated cargo clearance and releasing facility in Subic and Clark,
and to adopt the government’s national single window (NSW) program.

The NSW, which was created under Executive Order 482, enables the single submission and synchronous processing of data and information so that the BOC may release cargo shipments at the earliest possible time.

To put the agreement to work, the parties last week issued a joint memorandum order (JMO) that outlined the administrative and operational provisions for automated cargo facilities and defined the responsibilities of each party involved.

The agreement was signed by Arreza, CDC president Benigno Ricafort, SCADC chairman Edgardo Pamintuan and Customs Commissioner Napoleon Morales.Taiwanese locators
from Subic and Clark witnessed the signing held at the Clark Free Port.

Pamintuan said the agreement also put to work the vision of establishing an economic corridor to fully open trade linkages with Taiwan, particularly the Taiwan Export Processing Zone Authority.

He explained that the JMO intends to make smooth and easy the way people do business by providing, through the NSW program, a more efficient, less costly and fully automated system for merchandise that are admitted, transited and transferred into and between the free-port zones.

“The MOA and JMO will facilitate a smooth and seamless transfer of goods and people from and to Subic and Clark, and the export processing zones in Taiwan,” Pamintuan added.

Arreza said the Subic Bay Free Port would benefit substantially from the agreement as it woos Taiwanese investors, particularly those involved in information and communications technology, electronics, software design and biotechnology.

In June the SBMA said it will waive rental fees for high-technology firms from Taiwan under a bilateral trade deal between Manila and Taipei. The talks also resulted in an accord to grant reduced tariffs to Taiwanese manufacturers in Subic and Clark, and the assistance by Taiwan experts in training Filipino workers in integrated circuit design. (Henry Empeno/Business Mirror)

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