SBMA targets 11% hike in investments

The Subic Bay Metropolitan Authority (SBMA) is aiming to achieve an 11-percent growth in new investments at the Subic Bay Freeport Zone this year.

“We have an overall investment target. Last year, we did around P18 billion. We’re targeting around P20 billion this year,” SBMA chairman Roberto Garcia said in a chance interview.

He said the agency wants to attract investments in the tourism, maritime and high-value manufacturing sectors.

SBMA is promoting investments in tourism with meetings, conventions and other special events being held in the area.

Garcia said a total of seven new and expansion hotel projects are currently being undertaken at the freeport.

At present, hotels within the freeport have 3,500 rooms, enough to accommodate attendees of special events like the Ad Summit Pilipinas 2014.

The Association of Accredited Advertising Agencies of the Philippines has chosen the Subic Bay Exhibition and Convention Center again for the venue of the Ad Summit Pilipinas slated to be held from March 9 to 12.

Aside from tourism, the agency is encouraging investments in the maritime and high-value manufacturing sectors which could generate jobs.

Garcia said the Subic Bay Freeport Zone offers advantages to locators in terms of convenience for shipment of products through the port in the area.

“It’s more convenient to ship from Subic because you don’t have to go through Manila. You can ship from Subic to anywhere. That’s the advantage. Plus, it’s cheaper,” he said, noting six international shipping lines currently use the port.

To encourage locators, he said SBMA has allotted P800 million for capital expenditures this year for improvement works at the freeport.

The amount will be spent for the rehabilitation of major roads as well as renovation of the facilities at the freeport.

“This is unprecedented. In the past years, our capex is just at P20 million,” Garcia said. (Louella D. Desideerio, The Philippine Star)

http://www.philstar.com/business/2015/06/15/1465899/sbma-targets-11-hike-investments

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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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SBMA still keen on $7.5-B investment target

Despite the global economic slowdown that has affected some business locators in this free port, the Subic Bay Metropolitan Authority (SBMA) is still eyeing a $7.5 billion investment target in 2010 — a figure that is thrice the cumulative investment commitments recorded here in 2005.

SBMA Administrator Armand Arreza said in the recent State of the Freeport Address (SOFA), an annual event organized by the Subic Bay Freeport Chamber of Commerce (SBFCC), that the 2010 target he has set upon taking over as administrator in 2006 still stands.

“If you ask whether we can still achieve the ambitious goals that we have set for ourselves, with apologies to Barack Obama, I now say: Yes, we can!” Arreza asserted.

Arreza noted that cumulative investments in Subic last year have already exceeded the original 2010 target of $5 billion when actual investment commitments reached $5.8 billion. This represented a 116 percent increase over the original target, but is still some $1.7 billion short of the “enhanced” 2010 target of $7.5 billion.

In terms of direct employment, meanwhile, Arreza said that actual figures reached 87,502 in 2008, or 87.5 percent of the original target of 100,000. The enhanced target, meanwhile, has been set at 150,000.

Arreza added that Subic’s annual exports, which stood at $719 million in 2005, have grown to $977 million in 2008, or 65 percent of the original 2010 target of $1.5 billion. Still, the SBMA is aiming for a $2 billion annual record based on its enhanced target for 2010, Arreza said.

To achieve the enhanced targets, Arreza stressed that the SBMA and business locators in Subic “should change the name of the game” in four areas: logistics, manufacturing, tourism, and services, specifically in business process outsourcing and knowledge-based industries.

In logistics, Arreza said it is imperative to build in Subic a viable regional transshipment center, with daily ship calls to major regional logistics hubs.

This, he said, could be achieved by attracting heavy port users in Central Luzon, implementing automated import-export document procedures, attracting an air cargo carrier to replace FedEx, and earmarking P311 million this year for additional investments in warehouses and logistics facilities.

In the manufacturing sector, Arreza proposed to establish stronger clusters to capture greater value, encourage greater investment in R&D, capitalize on Hanjin’s presence to build a strong maritime industry, and develop additional industrial estates along the Subic-Clark corridor.

Tourism, meanwhile, could be further enhanced by tapping flights to Clark to build a foreign market, developing new cost-competitive tour packages, and introducing a hop-on, hop-off transportation system in the Subic Freeport..

Arreza also told locators here that Subic still “has no significant presence in the Philippine BPO market.” This situation, he added, could be corrected by providing additional incentives to pioneering companies, working with local schools to enhance curriculum, and developing an IT park within the Freeport zone.

Along this line, he also proposed to utilize in Subic the Worldwide Interoperability for Microwave Access (WiMax), a high-speed wireless data technology, as a platform for new businesses and services within the zone.

At the same time, Arreza said the SBMA would pursue outward expansion to Olongapo City, as well as neighboring areas in Zambales and Bataan in order to address the problem of limited land areas for development in the Subic Bay Freeport.

Arreza said that Olongapo would be ideal for the development of more commercial establishments, housing, and resorts, while Zambales could accommodate expansions in shipbuilding, utilities, as well as housing and resort industries.

Neighboring areas in Bataan, meanwhile, could be used for industrial estates, resort development, reforestation activities, and preservation of indigenous people’s domains, Arreza added. (SBMA Corporate Communications)


PHOTO: SBMA Administrator Armand Arreza is optimistic that the Subic Bay Freeport Zone could generate more investments, despite the global economic slowdown.

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