SBMA retakes control of Grande Island due to lease violations

The Subic Bay Metropolitan Authority (SBMA) has resumed possession of Grande Island after ending its lease agreement with GFTG Holdings Corporation.

SBMA officials said the move followed a decision by the authority’s board to terminate the contract after the company failed to fulfill agreed development commitments.

A pre-termination notice was issued earlier, giving the lessee a fixed period to vacate the property before enforcement measures were carried out.

The takeover was completed earlier this month after SBMA served a formal repossession notice and proceeded with implementation following the holiday period.

GFTG has since filed a request seeking the revival of its lease, which is now undergoing review by a board-level committee.

The island drew heightened public scrutiny last year after the arrest of several Chinese nationals accused of conducting unauthorized surveillance activities.

Investigators said the suspects allegedly used drones and electronic devices to gather images and data related to naval operations in Subic Bay.

Grande Island’s strategic location overlooking key maritime passages has since fueled security discussions, including proposals to place the area under tighter government control. (thechronicle.com)

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Wilcon to open branch in Subic Bay Freeport

Renowned leading home improvement and construction supplies retailer Wilcon Depot is set to open its ₱700 million branch within this premier Freeport soon.

The construction of a new branch inside Subic Bay Freeport was confirmed as the lease agreement was signed between Subic Bay Metropolitan Authority (SBMA) Chairman and Administrator Eduardo Jose L. Aliño and Wilcon Depot, Inc. Chairman Emeritus William Belo at the SBMA's administration building early this month.

According to the lease agreement, the branch will be located at Sampson Road, Central Business District of SBFZ, with a lot area of 5,308 square meters, including the renovation of a portion of Building 640, and the construction of a showroom. 

“This is a great addition to the companies located here, with many construction companies, home builders, and other DIY enthusiasts flocking to the area to buy building materials, tiles, plumbing, and other DIY items,” Aliño said.

Aliño said the company will hire 200 personnel for its operation, adding to the growing number of workers inside the Subic Bay Freeport Zone. (MPD-SBMA) 

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SBMA takes over aviation services company for failure to pay almost 20M dues

The Subic Bay Metropolitan Authority (SBMA) has taken over the facilities of Aviation Hub Asia, Inc., an aviation services company inside this premier Freeport, for failing to comply with the agency’s lease agreement.

According to SBMA Chairman and Administrator Jonathan D. Tan, the SBMA Board of Directors has approved Resolution No. 23-10-0296 that pre-terminates the lease agreement of Aviation Hub Asia on October 3, 2023.

The issuance of the resolution from the Board came after the company failed to settle unpaid lease rentals, comply with development commitments, and the non-submission of Performance Bond.

The erring company has an outstanding obligation amounting to P19,122,335.97 and US$106.02 in unpaid lease rentals, penalty on performance bond, among others.

The company has continuously failed to comply with its development commitment and non-submission of Performance Bond within the period stated in the Notice of Default with Demand to Pay dated September 30, 2022. The SBMA pre-terminated and cancelled the company’s lease agreement and repossessed their properties.

The properties that the company leased included portions of a hangar area, office space, shed and open space located at Building 8066, Subic Bay International Airport (SBIA) Southwest Apron, Subic Bay Freeport Zone.

Tan said that the development commitment that the company failed to comply includes the renovation of five maintenance, repair and overhaul (MRO) hangars and offices, storeroom and pilot briefing rooms, two additional new aircraft hangars for refurbishment and MRO within three years from the signing of their lease agreement dated March 19, 2019.

SBMA served a notice of re-entry into, repossession and take-over of leased premises with demand to pay dated October 17, 2023 that was received on November 3, 2023. The notice took effect on Monday, some 30 days from the receipt of the notice.

This is in line with the SBMA Chairman's determination to clear out erring locators engaging in the practice of landbanking or failing to do good with their development commitment. 

With this action, Tan believes that new and honest investors will be in the offing. (MPD-SBMA)

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SBMA takes over leased land of erring truck trading company

In consonance with the objective of President Ferdinand R. Marcos, Jr. to attain increased economic activity, Subic Bay Metropolitan Authority (SBMA) Chairman and Administrator Jonathan D. Tan has adopted a position to buckle down on erring locators, giving way to upright investors for more revenues and employment opportunities.

Earlier today, the agency Chief thru SBMA Senior Deputy Administrator Atty. Ramon Agregado led the repossession of the leased premises of the Nile Niigata Subic, a truck trading company located along Boton Highway, Subic Bay Freeport Zone.

In a letter to Nile Niigata President Muhammad Kafeel, Chairman Tan cited that the lease term of the company had already expired last January 31, 2022.

He further noted that the company has unsettled accounts with the SBMA amounting to almost P5Million. The said arrears represented the company’s unpaid lease rentals, Common Use Service Area (CUSA) fees, and the five percent share of the Aeta indigenous cultural community which had already accrued interests and penalties as of November 8, 2023.

Tan also mentioned that despite the foregoing defaults, he granted a final grace to fully settle their outstanding obligations and comply with the rules of the SBMA, on or before October 31. “Unfortunately, they failed to make a settlement despite the utmost liberality the SBMA has extended,” he added.

“While we try to understand the financial predicament of our locators, still, this is a business we need to run efficiently for our stakeholders and the country in general. This is why we are hell-bent and determined now more than ever, on taking over properties of erring locators so we can offer them to other legitimate companies that can help steer the country’s economy on an upward trend. The “how” is called “tough love.”

Nile Niigata was engaged in trading, import and export of trucks, buses and heavy equipment, including spare parts. It is also into trading of industrial construction and agricultural machineries and equipment, including conversion and repair parts. The company occupied 1,588 square meters of area of leased property, with a direct lease with the SBMA. (MPD-SBMA)

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SBMA repossesses former Duty Free Shop for multiple violations

The Subic Bay Metropolitan Authority (SBMA) has taken over the property of Duty Free Superstore, Inc. (DFSI) on Wednesday as the agency continues to clamp down on companies with contractual defaults.

The DFSI formerly occupies Building 332 and its adjacent lot at Burgos St., Naval Station. With an area of 651 square meters, while the adjacent lot has an area of 463 square meters.

Duty Free Superstore Inc. has a contractual default of non-payment of lease rentals, common use service area (CUSA) fees, and other charges that amounted to P15,932,595.16 as of March 2017.

“We conducted a clearing/ transfer of personal properties from the premises,” SBMA Chairman and Administrator Jonathan D. Tan,

The company has a lease agreement with the SBMA dated September 16, 2003, with a 25-year lease term that should have ended on September 15, 2028. The building and the adjacent lot was previously repossessed by the SBMA Legal Department on April 11, 2017.

Duty Free Superstore, Inc. has subsequently filed a Petition for Voluntary Insolvency at the Olongapo City Regional Trial Court, which was dismissed on September 2, 2020.

We want to continue with our thrust to repossess and reutilize idle lands inside the Freeport to promote a more efficient and vibrant business climate here,” Tan added.

During a hearing with Senator JV Ejercito, Tan said that the agency has currently repossessed 10 parcels of unused land, with 20 more lined up for repossession, adding that the agency is conducting audits to ensure business vibrancy at the Freeport. (MPD-SBMA)

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SBMA repossess 3 more properties of erring locators

True to its mandate of utilizing land areas efficiently, the Subic Bay Metropolitan Authority (SBMA) has taken over three more properties inside this premier Freeport on Tuesday.

According to SBMA Chairman and Administrator Jonathan D. Tan, the agency took over two buildings from Parabion, Inc. at the Cubi Triboa District within the Subic Bay Freeport Zone, adding that the area has a size of 1,176 square meters.

“The company has committed contractual defaults that prompted the SBMA to take over their properties. One is failure to comply with development commitments, and two for non-payment of lease rentals and Common Use of Service Area (CUSA) fees,” he said.

The company has amassed a debt in CUSA close to 10 million pesos as of July 28 of this year.

“We already sent them a final notice of default with demand to pay on November 22, 2022, then we sent them a notice of pre-termination and repossession on July 28 that was served on August 10. This is pursuant to SBMA Board Resolution No. 23-07-0173 that was approved last July 4,” Tan added.

Tan also pointed out that the agency took over Bldg. 8321 along Zambales Highway, Cubi Triboa District, and Bldg. 8359 along Bataan Road, also in the Cubi Triboa District.

The third property that was taken over by the agency was owned by Ramphos Corporation, a company that manufactures and sells amphibious ultralight aircraft.

The property is a 966-square-meter portion of Bldg. 8045-C at the Subic Bay International Airport (SBIA).

The company has an expired lease agreement with the SBMA since September 11, 2020, prompting the eventual take over by the SBMA last September 5, 2023.

The chairman confirmed that the company has contractual defaults such as non-payment of lease rentals (building spaces), CUSA fees, ACC and SOA fees amounting nearly PhP10 Million as of July 28 of this year.

The SBMA chief urged companies inside the Subic Bay Freeport to pay their dues diligently to ensure their seamless business operations inside this premier Freeport. (MPD-SBMA)

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Erring company in Subic Freeport closed by SBMA

Subic Bay Metropolitan Authority (SBMA) Chairman and Administrator Jonathan D. Tan led the repossession of a 1,500-square meter land area from an erring company as part of the agency’s thrust to regain areas for reutilization for other investors.

“We are repossessing leased areas of companies that do not comply with the agreement between them and the SBMA, and offer these areas to other investors,” Tan said.

The repossession of property transpired today at the Silver Arrow Import and Export Services, Inc. located at Lot 1, Boton Area, Argonaut Highway. The 1,500-sqm. land area of the company was repossessed due to contractual defaults.

According to Tan, the company failed to comply with its Investment and Development Commitment as provided in Section 7, Article II of the Lease Agreement between the company and the SBMA. Part of the said default is the failure of the company to develop the area with a funding allocation of at least US$1,000,000.

He added that the development commitment on the Leased Property should have a minimum cost of US$500,000 which includes the construction of a warehouse within two years from the issuance of its building permit.

“Aside from the Investment and Development Commitment, the company’s contractual default also includes non-compliance with the Omnibus Policy on Performance Bond, and failure to submit documents for the issuance of a building permit,” he said.

The said building permit is for the construction of a warehouse as stated under the company’s Development Commitment. Tan added that this is so despite the unreasonable length of time that had already lapsed since the execution of the lease agreement last July 28, 2015.

The SBMA had already served two notices before executing the repossession, with the Final Notice of Default with Demand to Pay dated June 19, 2023 that was served on June 26, 2023; and the Notice of Pre-termination and Repossession dated July 28, 2023.

“We are following President Ferdinand Marcos Jr.’s mandate to streamline operations within the Subic Bay Freeport Zone, and fully utilize land areas that are not being developed. But we are leaving space on the table for negotiations with the erring company so that they may continue with their operations efficiently,” Chairman Tan said.

The official said that this is the first of many repossessions that the SBMA will conduct as the agency clamps down on erring companies who have skimped on their obligations to the SBMA. (MPD-SBMA)

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SBF locator to return idle properties to SBMA

The Philippine Guarantee Corporation (PhilGuarantee) is set to return to the Subic Bay Metropolitan Authority (SBMA) a total of 22.6 hectares of idle properties as part of a settlement agreement between both parties.

SBMA Chairman and Administrator Jonathan D. Tan and PhilGuarantee President and CEO Albert Pascual signed a memorandum of agreement (MOA) and Deed of Dacion en pago at the SBMA boardroom on Thursday.

According to the Chairman, PhilGuarantee is set to turn over the leasehold rights of 14.6-hectare of the El Kabayo Stables, 2.4 hectares of the Times Square Complex, and 5.6 hectares of the Triboa Bay Lots, which amount to ₱2,777,650,836.01.  

Tan said that the agreement is in partial consideration or settlement of the company’s outstanding obligations as since October 27, 2020.

“I have been tasked by President Marcos to revive the Subic Bay Freeport Zone. There are so many facilities and land areas that have been left alone and are rotting away. I believe that the SBMA should get back these leased facilities and repurpose them for other companies to invest upon,” he cited.

The company came into possession of the aforementioned land properties from the Home Guaranty Corporation (HGC) after it merged with Philippine Export-Import Credit Agency (PhilEXIM), which was later renamed PhilGuarantee.

In 2004, through a foreclosure and subsequent Compromise Agreement, HGC acquired these land properties from the Financial Building Corporation (FBC). These properties were developed by the FBC through land leases with the SBMA in preparation for the Asia Pacific Economic Cooperation (APEC) Leader’s Summit held here in 1996.

HGC was able to dispose of all of the properties acquired from the FBC except for the properties being turned over. The company failed to dispose of the properties due to unpaid rental arrears of the said properties.

“From the period of 2007 to 2018, these three properties steadily deteriorated and rental arrears piled up, exceeding P3-billion,” Tan said.

On September 24, 2018, the SBMA issued a Notice of Default on PhilGuarantee for the pre-termination and repossession of the Subic properties should the company fail to settle its rental arrears. The company offered the assignment/ dacion to the SBMA of the three properties with a valuation of P3.291 billion.

“The SBMA counter-offered with a valuation of P2.263 billion, but both parties later settled for P2,777,650,836.01,” Tan said.

“Since the dacion is insufficient to settle all of PhilGuarantee’s obligations, the SBMA and the company have agreed to submit to arbitration the remaining arrears amounting to P375 million. And to help PhilGuarantee to cover its losses, the SBMA will give the company a share in the rental revenue generated by the agency when it is able to lease out the properties to third parties,” he added.

The company sought the help of the Office of the Government Corporate Counsel (OGCC) on the agreement, wherein the OGCC stated that PhilGuarantee needs the authorization of the Commission on Audit (COA) on the matter.

COA issued Decision No. 2022-489 dated December 5, 2022, which PhilGuarantee received only last April 26, 2023.

The COA ruling stated, “Wherefore, the request of the Subic Bay Metropolitan Authority and the Philippine Guarantee Corporation for this Commission’s authority to enter into a Memorandum of Agreement and Deed of Dacion en pago, is hereby GRANTED.” (MPD-SBMA)

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SBMA welcomes probe on Grande Island development deal

Directly addressing the reported call by an advocacy group for the Senate to investigate the alleged sell-out to Chinese investors of the Grande and Chiquita Islands here in Subic Bay, the Subic Bay Metropolitan Authority (SBMA) said it looks forward to such an official inquiry to resolve the long-drawn issue over the two tourism islands here.

SBMA Chairman and Administrator Wilma T. Eisma said that the Subic agency would welcome any investigation over the falsely reported “sale” of the islands, which were leased in 2019 to a joint venture between GFTG Property Holdings Corp. and Sanya CEDF Sino-Philippine Tourism Investment Corp., as Chinese company.

“First of all, I would like to point out that Grande and Chiquita have not been sold—they are still the property of the Philippine government,” Eisma said. “But there is an investor-company renting the islands, and which has committed P180 million to build a five-star hotel, restaurant and recreational facilities on these properties.”

“If someone would want an investigation of the Grande Island investment project, then I say, by all means get on with it!” Eisma reacted on Thursday.  “In fact, we are highly encouraging this group calling for an official investigation so that this matter can be resolved once and for all,” Eisma added.

The SBMA chief noted that while the proposed project by the Chinese investor-company has been “in deep-freeze” after the SBMA objected to some of the development plans two years ago, “some people are maliciously using it as an example of ‘creeping Chinese invasion’ in the country.”

“As much as that group, the Pinoy Action for Governance and the Environment (PAGE), says it has had enough of intrusions into our country’s exclusive economic zone, I would say that the SBMA, too, has had enough of speculation over the nature of this tourism project here,” Eisma said.

From the viewpoint of the SBMA, which is one of the country’s top investment promotion agencies, the Grande Island development project is a legitimate investment proposal in a Philippine special economic zone where 100% foreign ownership of business enterprises is allowed.

The SBMA Business and Investment Group said the Grande Island development project started in July 2000 with Silver Dragon Cruises Inc. (SDCI) entering into a lease agreement with the SBMA to rehabilitate Pier 684 on Grande Island and operate a ferry service within Subic Bay.

In June 2002, SDCI entered into a Lease and Development Agreement (LDA) with the SBMA to develop Grande and Chiquita Islands, but soon assigned its leasehold rights to GFTG Holdings Corporation in September 2002.

The SBMA said that over the years, it has approved various amendments to the agreement with GFTG, including escalation of revenue shares, extended leasehold period, special provision for developing and marketing housing units, and changes in ownership of what has become GFTG Property Holdings Corp.

Eisma said the biggest change in GFTG occurred in January 2019 when it brought in Sanya CEDF as its biggest shareholder, with 79.99% ownership of the firm. However, in May 2019, the SBMA Board of Directors withdrew its consent to the change in the control and ownership of GFTG, noting that the changes were made without its approval, thus violating the LDA between SBMA and GFTG.

At that time, the SBMA also noted that the Sanya-controlled GFTG had proposed to build 80 ultra-high end housing units over the water along the coastline of Grande and Chiquita islands. This, Eisma pointed out, was not allowed due to Constitutional limits giving the use and enjoyment of archipelagic waters exclusively to Filipino citizens.

Eisma said that ever since 2019, the Grande project has been in a limbo—for the SBMA, as well as for the investor. “The company continues paying rent for the property, but no new development has taken place—which is sad because Grande is Subic’s tourism jewel and it’s just going to waste,” she stressed.

Eisma added that if there may be some security concern over Grande Island because of its strategic location, then this is the best time to bring out and resolve the issue. “We welcome the call for a Senate investigation, but let me add that let’s take it very seriously. I hope the call was made not only for the purpose of grandstanding,” she added. (MPD-SBMA)

 PHOTOS:

The Grande and Chiquita Islands on Subic Bay; part of the existing resort project 

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SBMA extends grace period for rents, business fees

Business locators in this Freeport received yet another relief from the effects of the Covid-19 lockdown when the Subic Bay Metropolitan Authority (SBMA) extended the suspension of rentals and other payments due since the start of the enhanced community quarantine (ECQ) in March.

SBMA Chairman and Administrator Wilma T. Eisma said the SBMA board of directors passed a resolution on June 30 that gave a 119-day grace period for the collection of all due accounts, thereby moving the payment date for such collectibles to October 28.

The extended suspension period covered the March to September 2020 billings for lease rentals, common use services area fees, port charges, garbage collection fees, sublease shares, and gross revenue shares.

Eisma said the measure took off from Memorandum Circular 20-29 of the Department of Trade and Industry (DTI), which provided for a minimum 30-day grace period for the cumulative amount of residential and commercial rents that fell due during the quarantine.

“But to better assist the businesses here in Subic, the SBMA opted for a longer time when payments could be deferred to give the local businesses enough time to recover,” Eisma explained on Tuesday.

“This is actually the third extension we granted since the ECQ was imposed last March,” Eisma pointed out. “There is really a need to cushion the impact of the lockdown and provide economic relief to Subic stakeholders in support of RA 11469, or the Bayanihan to Heal as One Act,” she added.

Under the approved measure, the SBMA management also allowed amortized payments of all the unpaid billings from March to September 2020 in six monthly installments, or from October 2020 to March 2021.

Said billings will not earn any interest or penalty until March next year if the installment is completed, Eisma added.

Those who will benefit from the payment grace period include business locators leasing lands, buildings and other infrastructure from the SBMA, and residents paying lease on a monthly basis.

Eisma added that while sub-lessees are not covered by the suspension because only sub-lessors have contracts with the SBMA, the latter are encouraged to extend the same benefit to their tenants.

The SBMA official also clarified, however, that the regular policy on credit and collection applies to billings issued prior to the March ECQ, although interest and other charges are waived for such billings for the period July 1 to October 27, 2020.

Interests and other penalties will also be applied to installments that were not paid on time, and all unpaid bills by the end of the October 27 grace period will start earning interests, charges, and penalties the following day, Eisma added.

According to SBMA deputy administrator for finance Dea Sanqui, those who want to avail of the six-month installment scheme would have to apply by filling out a pro-forma promissory letter addressed to the SBMA chairman and administrator not later than September 30, 2020.

Companies availing of the installment scheme should attach a Secretary’s Certificate authorizing the signatory of the promissory note. Application forms may be obtained by sending an email to accounting@sbma.com, treasury@sbma.com, or oda.finance@sbma.com or from the account offices assigned to companies registered in the Subic Bay Freeport.

Sanqui said the SBMA Treasury Department will compute and determine the schedule of the six monthly installments and will notify the applicants before payment date. (MPD-SBMA)

PHOTO:

SBMA Chairman and Administrator Wilma T. Eisma addresses business concerns during a meeting with representatives of Subic Bay Freeport locators at the start of the ECQ in March. (MPD-SBMA)

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Issue permit to operate to locator, SBMA told

A local court has ordered the Subic Bay Metropolitan Authority to issue a certificate of registration and tax exemption (CRTE) to a locator, which filed a contempt case against SBMA.

In a decision dated Oct. 31, Olongapo City Regional Trial Court Branch 74 Judge Roline Ginez-Jabalde granted the petition of Brighterday Subic Ltd. Inc., operator of All Hands Beach, for a preliminary mandatory injunction.

Brighterday filed the petition last March, citing SBMA’s refusal to issue the CRTE because of a dispute on All Hands Beach’s supposed unpaid obligations.

The locator said SBMA refused to follow the terms and conditions of an earlier court ruling for the period of notices and observance of due process in case of any alleged violation to be taken into consideration and pre-termination to be exercised with caution by recognizing the right of Brighterday to seek remedy for 60 days.

SBMA administrator and chairperson Wilma Eisma and senior deputy administrator Ramon Agregado were among those named respondents in the contempt case.

Diosdado Rongcal, counsel for Brighterday, said SBMA refused to issue the CRTE even though the locator submitted the required documents and paid the prescribed three-year fees. (Bebot Sison, Jr., Philippine Star)

PHOTO:

All Hands Beach inside the Subic Bay Freeport Zone

https://www.philstar.com/nation/2019/11/17/1969388/issue-permit-operate-locator-sbma-told

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SBMA takes back 240 hectares from Marine Park

The Subic Bay Metropolitan Authority (SBMA) took back more than 240 hectares of property that remained undeveloped despite being leased to a marine theme park company 12 years ago.

SBMA Chairman and Administrator Wilma Eisma said her men closed down three separate areas at the 505-hectare property of Subic Bay Marine Exploratorium Inc. (SBMEI) because of failure to honor its development commitment under a lease and management agreement. SBMEI is the operator of popular tourism facilities Ocean Adventure, Camayan Beach Resort and Adventure Beach Waterpark here.

Eisma said the takeover of the properties proceeded smoothly and without any untoward incident.

The 240 hectares of repossessed property were 92 hectares tagged as Area B, 97 hectares at Area C and 51 hectares at Area E, all located at the Ilanin Forest of Subic Bay Freeport.

Twenty-two former ammunition bunkers, warehouses and other US Navy-era structures connected by tar-paved roads, which are in various states of disrepair were found in the three properties, the SBMA said, adding these indicate that the government-owned properties were not maintained through the years by the lessor.

Eisma expressed gratitude to the SBMEI management for cooperating in the repossession despite it having filed a case against the SBMA on October 18 to thwart the implementation of the agency’s pre-termination order issued on September 27.

“I can only thank the SBMEI management for cooperating in the takeover, which proceeded smoothly and without any untoward incident,” Eisma said.

“We also welcome the filing by SBMEI of a case in court because this move brings us one step closer to the resolution of this problem. Whatever the final decision of the court will be, you can count on the SBMA to honor it,” she added. (Patrick Roxas, Manila Times)

https://www.manilatimes.net/2019/10/31/news/regions/sbma-takes-back-240-hectares-from-marine-park/652201/

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Taiwanese firm to develop P15-B techno-eco park in Subic Freeport

The first eco-friendly industrial park will be up soon in this free port to house light industrial factories, commercial facilities, residential buildings, and a nature park.

Subic Bay Metropolitan Authority (SBMA) Chairman and Administrator Wilma T. Eisma said the project to be called the Tipo Hightech Eco Park (THEP) will be located in a 200-hectare property atop the gently rolling hills of Tipo, which is also the site of an expressway leading to this free port.

Eisma said the development will be undertaken by Xantheng Subic International Corp., a Taiwanese company which committed an investment of P15 billion for the project. The firm is also behind the development of a high-end condominium complex at Triboa Bay here.

According to THEP Project Manager Jeff Lin, Xantheng Subic’s project will generate a workforce demand of over 500 during the development period alone. More employees will be hired when factories and business start operating, he added.

Meanwhile, the project is also expected to deliver to the SBMA some P5 million monthly in land rentals alone.

During the launch of the THEP project held at Peninsular Hotel here last week, Chairman Eisma elicited a promise from the investors to give priority hiring to qualified upland farmers of Tipo and Mabiga villages, who were part of a “social fencing” project of the SBMA which started in 2002. The 136.59 hectares they occupied under the SBMA program will be part of the THEP.

“I want you to promise me that when the factories and business are up, you will give priority to hiring these families or their children,” Eisma said, referring to the 65 families who were part of the social fencing program.

The SBMA official also thanked the farmers for their cooperation, and for allowing a very smooth and pleasant negotiation and turn-over.

Lin said the THEP was conceived to accommodate the growing population of Taiwanese investors in the Subic Bay Freeport. However, the management does not discount giving room for other nationalities, he said.

“The business atmosphere in here is very conducive and attractive, especially with the on-going road and infrastructure projects of the SBMA. Many Taiwanese companies and investors from other countries, too, are interested to locate here,” Lin said.

According to the master plan submitted by THEP to SBMA, the development will include 101.47 hectares for light industries, 17.99 hectares for a commercial complex, 7.11 hectares for mixed use, 23.16 hectares for residential buildings, and 23.16 for a nature and environment conservation park.

There will also be a reserved area for utilities use and other purposes for a total development area of 209.27 hectares.

Eisma also congratulated Xantheng for coming up with the idea of an industrial park which will incorporate environmental conservation.

Eisma said this will be a first of its kind to be implemented in the Subic Bay Freeport. (CAE/MPD-SBMA)

PHOTOS:

[2] THEP Project Manager Jeff Lin explains the benefits of the project during the launching of the Tipo Hightech Eco Park (THEP) on October 9.

[1] SBMA Chairman and Administrator Wilma T. Eisma asks investors to employ Subic upland farmers during the development of the Tipo Hightech Eco Park (THEP).

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SBMA to foreclose Ocean Adventure Park

The Subic Bay Metropolitan Authority (SBMA) is set to repossess the popular marine theme park Ocean Adventure and related facilities due to multiple contract violations and failure to fulfill development commitments.

SBMA Chairman and Administrator Wilma T. Eisma said the agency on Friday served a notice of pre-termination of contract to the Subic Bay Marine Exploratorium Inc. (SBMEI), which operates the marine theme park complex under a lease agreement signed in 2007.

Aside from its failure to comply with its lease contract, the SBMEI also committed violations like illegal subleasing of property, constructing without permits, improper storing of waste, and closing public roads.

The company also has arrears of about P25 million on their payment scheme, as well as P7 million on its current billing, SBMA records showed.

“This is actually sad news for us, because Ocean Adventure Park is the pioneer theme park in the Subic Freeport and is a hugely popular tourist destination. However, its multiple contract violations have been a long-festering problem that must be addressed now,” Eisma said.

She explained that the SBMA has notified SBMEI of its violations as early as July and assiduously provided guidance to cure the problems, but the company did not submit a satisfactory proposal to correct the violations.

“We wanted them to stay, of course, but there was not much concrete action from their side,” Eisma said. “So after months of negotiation and attempts to help SBMEI keep its lease, there is no longer any other recourse but to apply the law and pre-terminate the company’s lease agreement.”

The SBMA official also stressed that SBMEI’s failure to deliver its development commitments not only constituted violations of its contract, “but also prejudiced the SBMA’s financial interest because it curtailed the agency’s earning potential.”

She added that even as the SBMA was willing to reconsider SBMEI's decades-old breach of contract, the park operator along with two other locators came out with a story accusing the Subic agency of not adhering to “ease of doing business” law.

Eisma said that the news report only served as a further irritant between the parties, since the SBMA has already put in place various measures to further ease business in the Freeport, including putting up a one-stop shop for permits and extending the validity of the Certificate of Registration and Tax Exemption (CRTE) from one to three years.

“We’re firm but fair,” Eisma said. “We agree that the SBMA should adhere to the ‘ease of doing business’ law, but that doesn’t mean we’d relax our rules to the detriment of the government.”

Under the pre-termination order, the SBMA will repossess all of the SBMEI’s 493.16 hectares of undeveloped property upon the lapse of the 30-day reckoning period. Then it will give the SBMEI 24 months to slow down its activities at the 11.6-hectare developed area that includes the Ocean Adventure Park, the Camayan Beach, and the newly-opened Adventure Water Park.

“We’re giving them sufficient time to wind down their operations at the marine park, remove all their animals and movable property, and vacate the premises. We are also concerned about the disruption and stress this would cause to the animals, hence the two-year leeway,” Eisma said.

The Ocean Adventure Park started operations in 2000 under a contract that covered only the marine park. In 2007 the SBMEI entered into a new agreement for the lease of a total of 436.89 hectares of land, and 67.87 hectares of bay area with a commitment to develop 101.71 hectares for more tourism.

Eisma said the SBMA has already informed the Office of the President of its decision to foreclose the SBMEI, but added that the agency has not yet closed the door to renegotiation. (MPD/SBMA)

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Subic Freeport gets new areas to host more investors

Subic Bay Freeport is getting additional 24,725 hectares, majority of which come from neighboring towns, to expand the former American naval base which has been running out of space it can offer to new investors and expanding existing locators.

Of this expansion area, five neighboring towns have initially allotted a total of 21,495 hectares of land to the Subic Bay Freeport, which has been running out of property to lease to more investors in the former American naval base.

Bird's eye view of the Subic Bay Freeport Zone

Data showed that six local government units have initially allotted these properties for Subic expansion. The biggest lot contributor is San Marcelino with 10,000-hectare allocation followed by San Antonio with 9,000, Olongapo with 900 hectares, Subic with 500-600 hectares, Hermosa 505 hectares, and Catillejos with 500 hectares.

Usually, Subic Bay Metropolitan Authority (SBMA) leases out properties to investors at certain rates. Under the plan, the San Marcelino lot would be used for mining, quarry and agriculture projects while San Antonio has been reserved for resort development and leisure industry.

The Olongapo LGU allocation would be used for housing, light industry and tourism projects while the 500-600 hectares in Subic could be offered for factories, agriculture and energy facilities.

Hermosa may be developed to house light to heavy industry, renewable energy, metal industry and staging of trucks auctions. The Castillejos land allocation can also be used for light to medium industry warehousing.

The remaining properties would come from the Redondo Peninsula with 3,000 hectares; infill development of 150 hectares and reclamation of 20 hectares. (Bernie Cahiles -Magkilat, Manila Bulletin)

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Subic Freeport business permits now valid for 3 years

To further promote the business-friendly atmosphere in this free port and boost government efforts on transparency, the Subic Bay Metropolitan Authority (SBMA) extended the validity of business registrations here from one to three years.

SBMA Chairman and Administrator Wilma T. Eisma recently released the first batch of Certificate of Registration and Tax Exemption (CRTE) that are valid for three years, and cited the agency’s streamlining of business processes to better serve the needs of business locators.

“This has long been overdue. The previous board under Chairman Garcia promised this to locators, but nothing happened. So we made it a priority project for our 2018 program and we’re proud that after all the hard work, it finally materialized now,” Eisma said.

Eisma added that her administration’s drive for a more investor-friendly climate in Subic is in keeping with President Duterte’s orders for transparency and good governance.

“We want to make life easy for our investors, and the SBMA will continuously work towards improving its system,” she pointed out.

The three-year CRTE was approved by the SBMA Board of Directors on January 26 this year. Then a public hearing to gain acceptance by stakeholders was successfully held on February 28. The announcement of the approved measure was subsequently published on May 9.

Eisma’s office had also taken over the approval and release of CRTEs to further speed up the issuance of this important business document.

According to Kenneth Rementilla, SBMA Deputy Administrator for Business and Investments, business locators were previously required to renew their CRTE annually. But under the new system, businesses with lease terms of more than three years can avail of a three-year registration, or opt for an annual renewal.

Rementilla added that CRTE-holders in the Subic Bay Freeport can enjoy waived value-added tax (VAT), ad valorem and excise tax on internal revenue taxes, customs and import duties, and national revenue taxes, among others.

However, the business locators would have to pay a final tax of 5 percent of the gross income earned (GIE), as required by law. Of the 5 percent final tax, 2 percent is allocated for revenue shares to local government units, while 3 percent goes to the national treasury.

Among those who received the three-year CRTEs from the SBMA are Dongyang Food Machinery Philippines Corp.; Johnson Controls-Hitachi Air Conditioning Philippines Inc.; Juken Sangyo (Phils.) Corp.; and UPower Building Corporation. (RFD/MPD-SBMA)

PHOTO:

SBMA Chairman and Administrator Wilma T. Eisma joins representatives of Subic-registered companies that received their 3-year CRTE from the Subic agency. (AMD/MPD-SBMA)

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Comteq’s unpaid P19-M debt ‘indisputable’; SBMA clarifies issue

The Subic Bay Metropolitan Authority (SBMA) has clarified misinformation about the ejection of the defaulting Comteq Computer and Business College from the building it previously occupied here, pointing out that the P19.97 million the school owed in terms of unpaid rentals was indisputable.

In a statement issued over the weekend, the SBMA said that Comteq has occupied Bldg. Q-8131 since 2011 and collected tuition fees from students studying in the premises, but “has not paid even a single cent” from the use of the building.

“Bldg. Q-8131 is government property and rent is due for such use,” the SBMA said, reacting to a statement attributed to Comteq president Danny Piano that the P19.97-million back rentals they owed the SBMA was “debatable.”

It added that the need to pay rent for property used and profited from was not debatable, as there was nothing in writing between the parties that said the use of the facility was “rent-free.”

The Subic agency peacefully took control of Bldg. Q-8131 on November 25 after the Comteq management failed to settle its hefty financial obligation with the SBMA.

As early as April this year, the SBMA Legal Department already sent Comteq a “Notice to Vacate with Demand to Pay” because the school administration has been operating without securing any lease agreement or business registration for the school.

Following the takeover, officials of the debt-ridden school blamed the SBMA for not issuing a lease agreement and a Certificate of Registration and Tax Exemption (CRTE), and claimed this prevented them from paying rent over the years.

However, the SBMA said it cannot issue any lease agreement and CRTE then because the Comteq management “did not submit the required payment scheme proposal for it to be able to settle its accounts” and instead asked the SBMA to give them a “rent-free period” from 2011 to 2015.

The SBMA Board, however, disapproved the said request because it was disadvantageous to the government and was not allowed by the Commission on Audit (COA).

The SBMA also noted that the statement of account purportedly showing zero balance in Comteq ’s record only reflected payment for utilities and other billings that were automatically charged for buildings occupied by business locators.

However, a validated computation from the agency’s Accounting Department showed the school management’s unpaid rental dues at P19,971,435.68 as of November 30, 2017.

Comteq officials had also taken the SBMA to task for being “insensitive” to the fate of students, whose studies were disrupted by the takeover. But the SBMA pointed out that the continued occupation by Comteq of Bldg. Q-8131 since 2011 without any rental, as well as the six-month extension it granted the Comteq administration last April, happened “precisely because SBMA is concerned about its students.”

It added that while it had allowed Comteq to operate for years despite the lack of a lease agreement or a CRTE because it was an educational institution, it can no longer tolerate the “blatant abuse and profiteering” by the Comteq management, which disregarded the repercussion of its growing debt on its students from whom they collected tuition and other school fees.

The SBMA added that in ejecting the defaulting business locator, it was just doing its job as estate administrator of the Subic Bay Freeport Zone. “It is not about money,” the agency made it clear. “It is about the obligation to collect rental dues for the use of the property of the government.”

It also said that it cannot be faulted for taking over Bldg. Q-8131 as it did, because it was school president Danny Piano who assured the SBMA Board in a letter that they would vacate the premises by October 31 this year, after the six-month extension given by the SBMA last April. (HEE/RBB/MPD-SBMA)

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SBMA takes over computer school for failure to pay obligations

The Subic Bay Metropolitan Authority (SBMA) on Saturday (Nov. 25) peacefully took control over the facilities of a computer school for failing to settle its financial obligation to the SBMA amounting to more than P19 million.

The move came after the Regional Trial Court (RTC) in Olongapo City denied the application of a Comteq Computer and Business College Inc.to restrain the SBMA from serving an eviction notice due to its failure to settle outstanding obligations.

The SBMA’s Legal Department, assisted by personnel from the Law Enforcement Department, entered the premises of COMTEQ Computer and Business College at about 6:30 in the morning and informed the school’s personnel of the takeover.

Atty. Melvin Varias, lead of the SBMA team who took over said, that although COMTEQ shall be closed to its students and personnel, students and faculty of the nearby UP Extension Program in Olongapo (UPEPO) shall be allowed to enter the complex and use the facilities it has been sharing with the computer school.

In an order issued on Nov. 20, 2017, Judge Richard A. Paradeza of RTC Branch 72 refused to grant Comteq Computer and Business College, Inc. a temporary restraining order (TRO) against the SBMA in the absence of a reason for its issuance.

“One of the requisites for the issuance of a temporary restraining order is the presence of a substantial right that needs to be protected,” Paradeza said in his order.

However, “It is clear that (Comteq) has no clear existing and unmistakable right in esse that is entitled to legal protection, a violation of which would justify the issuance of the injunctive relief applied for,” Paradeza ruled.

The court in its order noted that Comteq filed an application for TRO to prevent the SBMA from taking over the classrooms and offices that the school occupied in Bldg. Q-8131 located at the Subic Bay Freeport Zone. The school also sought “to prevent the harassment of students, teachers and staff by padlocking the classrooms, sequestering books and learning equipment, and preventing students and teachers from conducting their right to attend classes.”

However, Paradeza noted that on Nov. 14, 2017, the SBMA had already issued a notice giving Comteq until Nov. 19, 2017 to vacate the subject premises and to pay its outstanding obligation with the SBMA that amounted to P19,971,435.68.

He also noted that the SBMA has allowed Comteq to use the said facilities up to Oct. 31, 2017 for humanitarian reason, and that Comteq “had even wrote a letter dated April 27, 2017, asking SBMA that it be given up to the end of October to look for a new building to relocate to.”

Paradeza said that Comteq had essentially argued that pursuant to Batas Pambansa 232, or an Act for the Establishment and Maintenance of an Integrated System of Education, as well as Section 32 of the Manual for Regulations for Private higher Education, the termination of a school year shall be effected only at the end of an academic year.

But the judge also ruled that Comteq’s right to occupy the subject premises “had already expired on Oct. 31, 2017, pursuant to SBMA Board Resolution No. 17-05-0167 dated May 10, 2017” and that a similar notice to vacate and demand to pay had been sent by the SBMA to Comteq on March 30, 2017.

“It would appear that ample time was already given to the plaintiff to vacate the subject premises,” Paradeza said.

“The fact that the eviction notice was given in the middle of academic year is not substantial enough to prove the plaintiff’s right in esse. Besides, plaintiff already agreed to vacate the subject property at the end of October 2017 per letter dated April 27, 2017,” the judge added.

“Therefore, at this stage of proceedings, it cannot be said that plaintiff Comteq Computer and Business College, Inc. has substantial right on the subject premises that needs to be protected,” hence the court’s refusal to grant a TRO, Paradeza added. (30)

The SBMA issued Comteq a notice to vacate its facilities it is occupying at Building Q-8131 on Manila Avenue at the Central Business District after the school failed to meet requirements for its continued operation here.

SBMA concerned over fate of Comteq students

Earlier, the SBMA aired its concern over the fate of students of Comteq Computer and Business College, all because of the latter’s failure to pay its rental dues despite the leeway the agency has given for the school to meet its obligations.

“It’s because of the students that the SBMA has given Comteq enough consideration for far too long. This has been a lingering case of irresponsibility on the part of Comteq owners and I am sorry to say that we cannot extend any more generosity to them,” SBMA Chairperson and Administrator Wilma T. Eisma said.

Eisma said that as early as April this year, the SBMA Legal Department has already issued a “Notice to Vacate with Demand to Pay” because the school has been operating without any valid lease agreement nor business registration with the SBMA, as well as failing to pay obligations with SBMA in the amount of Php17,771,863.19.

Eisma explained that the SBMA has actually taken over the Comteq facility last April, but the Board has granted another extension of six months for humanitarian reasons.

“However, during this final extension of six months, Comteq should have either settled their arrears with SBMA or should have responsibly arranged for the migration and transfer of their students, but they did not. Instead, they filed a case in court, thus betraying the kindness of SBMA,” she added.

In a letter dated April 27, 2017, Comteq president Danny J. Piano argued that the basis for the SBMA back pay rent of P17.7 million “is highly debatable” and added that the school “just have no capacity of paying back even a significantly reduced back pay rate.”

“Because of this, the new Board of Trustees of Comteq have come to the decision to transfer Comteq College out to Olongapo City where the rates are much lower,” Piano said.

Piano also asked for “a sufficient-enough transition” for the transfer, which he said can be successfully achieved by the end of the 2017 first semester or end of October.

With this, the SBMA Board allowed a six-month extension, but ordered that the school “should be fully out of the Subic Bay Freeport facility before the start of the 2017 second semester, or until October 31, 2017.”

SBMA records indicated that Comteq, which offers courses in preparatory, secondary, and tertiary levels, originally leased Bldg. Q–7932 starting 2008. In 2011, when construction of the Harbor Point Mall began, Comteq relocated to Bldg. Q-8131 where it occupied 10 rooms with a total area of 808.61 square meters, as well 188.55 square meters of common area.

Comteq’s transfer to the new location, however, met some problems as the building was also occupied by the University of the Philippines Extension Program in Olongapo (UPEPO), which wanted to solely occupy the building. After the SBMA Board finally approved Comteq’s lease proposal in August 2015, Comteq asked for a “rent-free” period from January 2011 when it transferred to Bldg. Q-8131, to August 2015 when the SBMA approved its lease. The SBMA, however, denied this request.

In May 2016, the SBMA reiterated its denial of Comteq’s “rent-free” request and further advised the school of its total back rentals amounting to P13.12 million. It also asked Comteq to submit a payment scheme proposal on the settlement of its rental obligations so that SBMA may process a contract for 25 years under the policy on educational institution.

However, without any positive response from the school on these matters, the SBMA Legal Department declared in August 2016 that because Comteq did not have any lease agreement with SBMA, or a sublease agreement with other Subic locator, or a valid certificate of registration, it was engaged in unauthorized operation inside the Freeport and in illegal use of SBMA property.

In January this year, the SBMA Board of Directors approved the issuance of a Notice to Vacate against Comteq and instructed management to file a case against the original owners for collection of the company’s outstanding obligations. (HEE/RBB/MPD-SBMA)

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SBMA shelves Redondo industrial estate project

The Subic Bay Metropolitan Authority (SBMA) has temporarily set aside the development program for the Redondo Peninsula following the collapse of an agreement with a firm that proposed the construction of an industrial estate and solar farm in the area.

SBMA Chairman and Administrator Wilma T. Eisma said the agency’s Board of Directors has decided to take a step back and called for the development of a master plan for the entire Redondo Peninsula before opening it up again to investors.

“We’re basically back to square one, because the project proponent was not able to honor the commitments under its very own proposal,” Eisma said.

“The SBMA is still open to receiving proposals though, should these be consistent with the SBMA’s objective of developing Redondo into an industrial and maritime hub,” she added.

The SBMA Board of Directors had earlier revoked the lease and development agreement (LDA) with Dynamic Konstruk International Eco Builders Corp. (DKIEBC), invoking an automatic revocation clause under the agreement in case the proponent did not meet its obligations.

Eisma said that despite several extensions given by SBMA, DKIEBC still failed to deliver the required advance rentals and security deposit, thus leaving the Subic agency with no other recourse but to revoke the contract.

According to SBMA records, Dynamic Konstruk initially proposed in May 2016 to develop 982 hectares of land at the Redondo Peninsula, which also hosts the Hanjin shipyard and the coal-fired thermal plant project of Redondo Peninsula Energy Inc.

Calling the project “Redondo 200MW Solar Farm and Eco Dynamic Industrial City”, DKIEBC said it will devote 400 hectares of the project site to a solar-power generation farm and 582 hectares to an industrial hub.

During negotiations for the project’s 50-year lease, however, it became apparent that DKIEBC, a certified “A” PCAB licensee, as well as its partners, lacked adequate experience in solar power generation. It also seemed not to have enough funding to back up its US$798-million investment commitment.

Eisma said the SBMA Board required a P2.2-billion paid-up capital, and DKIEBC made a counter-offer to pay upfront the amount of P472 million, which is equivalent to 50 percent of its rental and security deposits.

“When DKIEBC also failed to honor this commitment, the project was considered revoked pursuant to a resolution of the SBMA Board,” Eisma added.

As of now, the SBMA has stopped dealing with the company on the aborted project. It had also warned the public on reports that some parties are still seeking investors to fund the project despite official revocation by the agency.

“This is already a closed issue. Anybody seeking funds for the Redondo industrial city and solar farm project is probably doing some scam operation, so we urge everyone to beware,” Eisma concluded. (HEE/MPD-SBMA)

PHOTO:

Perspective of the supposed development project proposed by Dynamic Konstruct at the Redondo Peninsula in Subic Bay Freport.

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New firm takes over Lyceum Subic

A new company has taken over the operations of Lyceum of Subic Bay Inc. (LSBI), allowing the debt-ridden firm to pay more than P31 million in overdue rentals and other arrears to the Subic Bay Metropolitan Authority (SBMA) and to honor its development commitments for its two campuses here.

SBMA Administrator and CEO Wilma T. Eisma said the SBMA, through a board resolution, has approved the reassignment of LSBI’s leasehold rights to Premium Technical Training and Facilities Inc. (PTTFI), which assumed the financial and developmental obligations of the original lessee.

The PTTFI is 30-percent owned by LSBI.

“As far as we can see, this is a win-win solution to a problem that has been hounding the SBMA since October 2015, when it preterminated the contract of Global Daeil, over the Cubi property,” Eisma said.

Eisma added the SBMA repossessed the property in January last year and later awarded it to Lyceum, which had the best business model.

“Unfortunately, Lyceum was not able to operate immediately and market the business properly because of some issue with the previous occupant, so we had a problem that compounded itself over time,” she said.

Eisma added the compromise agreement was made possible with the withdrawal by LSBI from coverage of the SBMA policy-granting educational institutions a 75-percent discount on rentals, which are to be plowed back to scholarship programs and facilities improvement.

Under the new agreement, PTTFI took over the 34,196-square-meter Lyceum campus at Subic’s Cubi-Triboa District, which had P23 million in rentals and utility fees arrears, as well as P16.68 million in unpaid accounts left by its previous operator, Global Daeil Subic Inc.

The deal also required LSBI to pay its debts for the Lyceum campus at Subic’s central business district (CBD).

The new operator initially paid the SBMA P31 million for the arrears, and issued checks to cover outstanding obligations for both the Cubic and CBD campuses.

Beatrix Anagaran, manager of the SBMA General Business and Investment Department, said the amended lease and development agreement for PTTFI was “overwhelmingly beneficial to the SBMA”, as it called for an increase in monthly rent from the discounted rate of P1.22 million to the appraised-value rate of P4 million.

The agreement also provided for an increase in escalation rate from 2 percent per annum starting on the third year to 6 percent per annum starting the second year.

Anagaran said upon taking over the Cubi property, Premium Technical, likewise, committed to pay the P16-million debt of Global Daeil within a three-year amortization period, and retained LSBI’s committed investment of P50 million to P100 million, a committed employment of 180 workers, a development commitment of P10 million to P20 million, and the provision of 36 scholarship grants per year.

She said the new operator also committed to put up a business process outsourcing (BPO) facility at the Cubi campus, as well as a modern training laboratory. (Henry Empeño, BusinessMirror)

http://businessmirror.com.ph/new-firm-takes-over-lyceum-subic/

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