BIG CHANGES are coming to SBMA
On its 24th founding anniversary
For more than 200 years, Subic Bay was the subject of groundbreaking transformation — from a former ship supply and repair port during the Spanish era, to a naval and military base under the Americans, and finally, as the Philippines’ most vibrant and most profitable free port zone.
Now, under the new Duterte administration, Subic Bay Freeport Zone (SBFZ) is set to embrace bigger changes while continuing on its path to growth and development through the leadership of new Subic Bay Metropolitan Authority (SBMA) chairman and administrator Martin Diño. The former Volunteers Against Crime and Corruption (VACC) chairman is promising to rid the free port zone of red tape and corruption in an effort to further boost its business-friendliness and attractiveness to investors and tourists. HISTORIC FREEPORT
Diño inherited a free port zone rich in history and groundbreaking achievements. Founded in 1991 by virtue of Republic Act 7227 or the Bases Conversion and Development Act, Subic Bay Freeport Zone was envisioned as the country’s first self- sustaining, industrial, commercial, financial and investment center. It opened on November 24, 1992 right after the last ship carrying US servicemen left Subic Bay.
At the time of its establishment, SBFZ was in a state of ruin and abandonment following the 1991 Mount Pinatubo eruption and expulsion of the US military bases in the country. The former naval base, which has been the lifeline of many Filipinos for the past 50 years, was covered in ash and unable to sustain economic life.
Through the sheer will and determination of 8,000 volunteers led by pioneer chairman and administrator Richard Gordon, SBFZ came out of the ashes and reclaimed itself from a catastrophic plight.
By 1996, SBFZ has become the symbol of the Philippines’ economic resurgence under the Fidel Ramos administration. It welcomed and hosted world leaders during the 1996 Asia- Pacific Economic Cooperation (APEC) Summit. It became home to several foreign companies that relied on the free port’s tax-free environment for their manufacturing, ship repair and logistics businesses. American naval forces continued to make regular port calls to the free port zone.
By the turn of the millennium, SBFZ has become one of the country’s important shipbuilding hubs with the opening of shipyards by major shipbuilders such as Hanjin Heavy Industries and Construction (HHIC) and Keppel Offshore & Marine. It has also become a major transshipment hub with the opening of the New Container Terminal (NCT). SBFZ’s industrial parks have also attracted even more locators ranging from food manufacturing, metal fabrication and electronics manufacturing to business process outsourcing and information technology. SUBIC TODAY
As of 2015, SBMA has maintained its position as the country’s most profitable free port zone with gross revenues of P2.75 billion — the highest in its 23-year history. It also posted the highest operating income (EBITDA; earnings before interest, taxes, depreciation and amortization) at P1.48 million and the highest net income of P841 million. It has contributed P19.3 billion to the national economy in the past year.
SBMA also remains the biggest employer of all free port zones in the country. In 2015 alone, an additional 4,693 jobs were created, increasing SBFZ’s total employment figure to 101,651, which are employed in different industries. The biggest employers remain to be the services, shipbuilding and manufacturing sectors. All-in all, industries at SBFZ exported goods and services that are worth $2.5 billion in the past year.
Tourism continues to be a huge revenue maker for SBFZ. Last year, more than seven million visitors went to Subic Bay, of which 1.4 million were tourists. MICE (Meetings, Incentives, Conferences and Exhibitions) events are among the main reasons for the increase, with 249,617 participants participating in 290 MICE events in SBFZ last year. Sports events have also surged, with 61,470 participants joining 82 sporting events last year.
With these stellar achievements in attracting investment, employment and tourism, SBMA was declared Free Zone of the Year in Asia for 2015. The annual distinction is given by fDi Magazine, a publication of London’s Financial Times. CHANGE IS COMING
Chairman Diño promises to continue SBMA’s record- breaking growth and development while enforcing President Rodrigo Duterte’s mandate of ridding government agencies of red tape, graft and corruption. Diño, who has been in office for only more than one month, already sees a lot of problems and issues that need to be addressed.
“There are plenty of physical problems hounding SBMA — pock-marked and unlit roads, empty lots and buildings, and various complaints from our locators. It takes a long time for our locators to renew their licenses because of the tremendous paperwork required, forcing them to resort to bribery to speed up the process,” Diño told The Philippine STAR.
His answer to the problem: Require SBMA employees to process transactions within three days. He also warned employees that they would be suspended or removed from service if proven guilty of soliciting or receiving bribes.
As for the degrading quality of services for locators at SBMA, Diño questioned the collection of additional fees by the previous
administration.
“SBMA has huge collectibles amounting to roughly P3 billion. But where is all the development despite these revenues? How come, in the middle of the ball game, the free port would introduce new fees that add to the burden of our locators?” Diño asked.
What Diño was referring to are the Common Use Service Area (CUSA) fee and the Environmental and Tourism Administrative ( ETAF) fees. Introduced in the previous administration in order to reduce the free port’s reliance on the national government for the free port’s maintenance, as well as to fund environmental preservation and tourist development in the free port, the fees have caused great concern from locators in recent years. According to Diño, he plans to investigate how these fees were used, as well as look into the issue of smuggling in the free port.
“We need to look into the bottom of these issues and find out the involvement of former officials and employees. I am already tasking my legal time to look into appropriate legal actions that could be taken regarding this matter,” Diño said. Eagle-eyed vision
Diño’s eye for SBMA’s future is as clear as his eye against crime and corruption. His got some of the grandest plans to further expand the free port’s viability as an investment and tourist destination and make it at par with Hongkong or Singapore.
Among these plans is the expansion of the free port’s development to a new 3,000-hectare site in the Redondo Peninsula across Subic Bay. The site, which stands alongside HHCI’s shipyard, is set increase the free port’s land area for new locators such as factories, offices and other establishments.
“To make this site accessible to downtown SBFZ, we need to built a bypass road along the mountains that connects it to Subic-Clark-Tarlac Expressway. That’s a P15-billion road that would allow motorists to go directly to the new site without having to pass through downtown. When I had the privilege to be part of President Duterte’s state visit to China, we were able to meet two potential investors who are willing to build the project through Public-Private Partnership scheme. All that is need is a sovereign guarantee from the government for them to agree,” Diño explained, adding that the new site will create an additional 150,000 jobs for the free port zone.
Another proposed project is the expansion of