Airport economic zone
It was amusing to read so many misinformed opinions from otherwise intelligent observers regarding President Junior’s veto of the law providing perks for the Bulacan airport economic zone. They thought the airport project, which had already broken ground, was a goner.
That’s because Ramon Ang of San Miguel is an enigma to policy wonks and business rivals. He doesn’t make business decisions the way they do. He takes risks others won’t dream of taking. It’s partly jealousy too. They can’t accept that the upstart Tondo boy, who has not taken an economics course and with no MBA from some fancy foreign business school, is doing better than they are.
Anyway, Press Secretary Trixie Cruz-Angeles clarified that the construction of the P740-billion international airport in Bulacan will push through because San Miguel already has an approved franchise to operate the airport.
“The construction of the Bulacan international airport and aero city is not affected by the veto. The presidential veto was meant to make necessary corrections and include the missing processes that might render HB 7575 entirely unconstitutional,” she explained.
What was vetoed was a bill that would provide guaranteed perks for potential locators in a special economic zone within the aerocity. DOF said it is not needed, but I guess RSA just wants to make sure guarantees given to locators will not be pulled out after investments are made.
We have lost credibility among international investors after Duterte negated long established contracts with the private sector to run the Metro Manila water concessions. If our government can screw local investors, will foreign investors feel safe?
San Miguel Corp. is investing P740 billion to turn a 2,500-hectare property in Bulacan into an aerotropolis featuring a world-class gateway capable of handling 100 million passengers annually, plus an adjacent economic and industrial hub.
RSA thought of putting up the Bulacan Airport Special Economic Zone to take advantage of recent geopolitical developments. Many nations are nervous about Taiwan being taken over by China and with it, the world’s biggest manufacturer of semiconductor chips.
Taiwan Semiconductor Manufacturing Co. or TSMC is the world’s largest contract manufacturer of the semiconductor chips – otherwise known as integrated circuits – that power our phones, laptops, cars, watches, refrigerators, and more. Its clients include Apple, Intel, Qualcomm, AMD, and Nvidia.
TSMC is said to be scouting for new locations to spread out their manufacturing facilities. This will protect their clients from any supply shortage if China invades Taiwan, similar to Russia’s invasion of Ukraine.
In a recent briefing for business columnists, RSA said his intention is to create a science and technology export hub with the cheapest logistics cost because it is next to the airport and less than half an hour to the Manila seaport via an expressway he is also building.
I got the impression he was already in conversation with potential locators, including TSMC and others, that will manufacture battery power storage systems, electric vehicle makers, and modular nuclear power assemblies. He is thinking the zone can export $200 billion annually.
It is a waste, RSA said, if we do not capitalize on the tremendous growth opportunities the new airport will bring.
In an exchange of Viber messages, RSA said the airport is economically viable on its own. The economic zone will simply add more value to our economy by making use of the advantages of having the country’s largest worldclass international gateway nearby.
Explaining his concept, RSA said “SMC will just provide the land. All revenues will go to the government through a government-run ecozone body. This is also aligned with the CREATE Law.
“With this, we can be even more competitive in the Southeast Asian region and ASEAN in terms of attracting locators specializing in various industries, possibly aviation, technology, science, medicine, manufacturing, and many others.
“This will bring much-needed jobs, livelihood – and valuable experience – to our people. Even local industries throughout Luzon will benefit from increased employment and livelihood opportunities, tourism, economic activity, and the improvements in infrastructure that will come with the development.”
In that briefing we had over a month ago, RSA explained that the expected export revenues would come from four areas – the new airport, the ecozone focused on semiconductor manufacturing and industrial goods like batteries for EVs and renewable energy power plants; a university city in tie-up with leading universities in the US, Europe, and China; a world class medical center with research facilities in a tie-up with a university with the caliber of Stanford.
I couldn’t help thinking that RSA was dreaming as he explained his vision for the Bulacan aerocity to us. Maybe he is, but he has already started moving to realize that dream.
Indeed, even before the pandemic, while RSA was waiting for DOF to allow him to start breaking ground, Raoul Romulo, CFO of SMC Infrastructure, confirmed to me that SMC has already been paying commitment fees for some of the funds needed by the project. In other words, the government approval delay was costing SMC real money.
There has been a lot of tiresome discussions for over 10 years now on where to locate a new airport. It was only RSA who managed to successfully navigate the complicated approval process and was willing to bet his balls on his Bulacan airport. Our entrepreneurs, mostly working with inherited wealth, are always too seguristas rather than risk takers.
This is why I believe President Junior will make sure the Bulacan airport project will happen. RSA has promised two runways will be ready for a partial inauguration before the midterm elections or three years from now, the first major infrastructure to open under the new Marcos administration.
The Bulacan airport will also be just about half an hour away from Manila City Hall and Malacañang via the expressway that RSA said would be simultaneously operational with the airport.
It is shameful for those envious of RSA and San Miguel to cheer the veto of the ecozone bill with incomplete data. Even Malacañang said the veto is just the fastest way to cure defects in the bill, but the project is all systems go.