New investments in Subic expand by 1,215%

The Subic Bay Metropolitan Authority (SBMA) recently reported a hefty increase of 1,215 per cent in the amount of committed investments that came into this free port for the first half of the current year.

From US$43.86 million posted for the same period in 2012, committed investments from new approved investments rose steeply to US$575.33 million from January to June this year.

“Despite a drop of 55 per cent in the number of new investment projects in the Freeport for the first half of the year, compared to (the first half of) last year, bigger investments have been signed up this year,” SBMA chairman and administrator Roberto Garcia disclosed.

According to the agency’s business group, the top five investments for the period were Resom Resort Philippines, Inc.’s expansion project, FFC Subic Seafood Corporation, Johanna-Subic Seafood Corporation, Simon and Stanley International Trading and Development Corporation, Inc., and Subic Bayview Development Corporation.

The combined committed investments of these projects alone added up to US$554 million, or 96 per cent of the total amount of committed investments from January to June.

Projected employment from new investment projects also climbed by 60 per cent – from 1,790 in 2012 to 2,868 this year. The increase largely came from the same top five investment projects, which made up 73 per cent of the projected employment for the period.

Garcia attributed the agency’s latest performance to the favorable economic trends in the country, noting further that with the country enjoying one of the fastest growth rates in the world and its recent investment rate grading upgrade by prestigious ratings agencies, “the Philippines today is definitely a big conspicuous blink in the radar screen of investors worldwide”.

“Encouraged by this scenario, we hope to sustain the positive inflow of investments into the Freeport for the rest of the year, especially in light of SBMA’s improved finances, which now allows us to plow back part of our earnings into upgrading our support infrastructure and equipment for better business and investment services,” he said. (AMF/MPD-SBMA)

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2013 a productive year for Subic - SBMA chief

Subic Bay Metropolitan Authority Chairman and Administrator Roberto Garcia announced several huge projects for Subic Bay Freeport this year.

Garcia said most of the negotiations with different investors done last year would be pushing through in 2013.

Resom Resort Co., Ltd project in Minanga, in Morong, Bataan was sidelined because of a land dispute but this year, but Garcia said it will pursue three major builds.

Garcia said the first will be a multi-million dollar luxury hotel at the former mini golf area along the famous waterfront road.

The second will be a hotel, casino and spa in Cubi and a golf course in Minanga in Morong, Bataan.

Resom will invest an estimated P600 million in the projects, Garcia said.

Ocean Nine, which was also side-tracked last year due to a legal problem will start to renovate the former Legenda Hotel.

“Included in their license which is expected to come out this week is for the operation and renovation of the former Legenda hotel and the El Centro Convention Center,” Garcia said.

“These two project will infuse $30 million,” he added.

Another company in the leisure industry which will be doing a project in Subic this year is Holiday Inn with an estimated investment of P1.8 billion.

The agency is also looking for an investor to lease out the current administration building along waterfront road.

The administration building is considered as a historic landmark in Subic to some because this building was the former command center of the United States Navy.

Talks are currently being held with companies into aircraft and maintenance service, he added.

“We are also talking to several Hong Kong companies who are considering to relocate operation in Subic.” Garcia said.

“One company we are talking to right now has 16 and the other one has 36 charter jets, if all goes well, the airport will be a busy place this year,” he said.

Vale, an iron ore transshipment company who brought around P60 million in revenues for Subic last year is looking at doubling its revenues this year, he said.

Subic’s port is also expected to be busy after Garcia said Purefood, San Miguel and another fertilizer firm expressed keen interest in it.

Black and Decker, a US-based powertool manufacturer, will also be setting up shop in Subic soon, Garcia said.

“With all this investments coming this year, we are confident that Subic will prosper this year and we hope that we can sustain all of this and add more,” he added. (Anthony Bayarong, Philippine Star)

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SBMA Targets $800-M 2013 Investments

Subic Bay Metropolitan Authority (SBMA) expects $800 million in investments this year, a strong turnaround from an estimated $200 million in 2012, with two new shipbuilding facilities to be established by EU firms and major tourism projects.

SBMA chairman and administrator Roberto V. Garcia said this year would be a turnaround year from the poor investments performance last year.

"We expect $800 million in new investments this year because more investors are coming in. Last year was poor because all we have were mostly inquiries from foreign investors," Garcia said at the sidelines of the Philippine Port and Shipping Conference.

SBMA has no official report yet on the investments inflow in 2012, but Garcia estimated it at only $200 million.

Of the $800 million projected investments this year, $600 million are expected to come from the two new shipbuilding facilities which will manufacture small crafts for the exports market. The rest of the investments projection would come from the tourism and gaming projects of major hotel and casino operators.

Garcia, however, refused to identify the company but said they are European investors, which are expected to locate within the year in the freeport.

At present, Subic Freeport hosts the $2 billion shipbuilding facility of Hanjin of Korea.

While SBMA was a laggard in investments generation in 2012, Garcia earlier reported that the freeport achieved the highest profit last year in its 20-year history.

The freeport posted a record profit of P789 million in 2012. This is a drastic turnaround from the P1.2 billion loss in 2011.

Garcia said that the turnaround was due to increased revenues, reduced operating expenses and a favorable exchange rate.

The revenue increase of 16 percent versus 2011 was brought about by new major projects in seaport operations such as the Vale ore transshipment project and the start of commercial operations of the Phase 2 of the new container port.

Coupled with an aggressive collection campaign on existing accounts, new revenue streams were created through increased admission fees on importations and the imposition of fees to defray municipal expenses that were previously subsidized.

Operating expenses decreased by seven percent versus 2011, as the Agency implemented a comprehensive austerity program. Salaries similarly dropped by seven percent. as a freeze hiring policy was implemented and manpower count decreased. Repairs and maintenance likewise decreased by 46 percent and advertising was slashed by 35 percent versus 2011. As a result, earnings before interest, taxes and depreciation (EBITDA) jumped from P329 million in 2011 to P629 million - a 91 percent increase.

Due mainly to favorable exchange rates, unrealized foreign exchange posted a gain of P1.1 billion in 2012 from the previous year's FOREX loss of P566 million.

In the meantime, the SBMA's 2013 Strategic Planning session focused on developing new initiatives to sustain and improvefurther SBMA's financial position in the coming years.

New strategic initiatives concentrating on the seaport, airport, tourism, and commercial and industrial leases were formulated, targets were set and detailed plans of action were submitted and approved by the SBMA Board. (Bernie Cahiles-Magkilat, Manila Bulletin)

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