Olongapo SubicBay BatangGapo Newscenter

Wednesday, March 04, 2009

SBMA keeping $7.5-B investment target despite economic downturn

SUBIC BAY FREE PORT—Most agencies may be scaling down their business projections in the face of the global economic downdurn, but the Subic Bay Metropolitan Authority (SBMA) is still eyeing a $7.5-billion investment target in 2010 — a figure thrice the cumulative investments recorded over the first 13 years of the Subic Bay Free Port.

“The enhanced 2010 target still stands,” SBMA Administrator Armand Arreza said in his recent State of the Freeport Address (Sofa) to the Subic Bay Freeport Chamber of Commerce (SBFCC), an annual event wherein the SBMA defines its programs and thrusts for the year.

“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 said.

Arreza set the grand vision in his first Sofa in 2006, back when South Korean shipbuilder Hanjin Heavy committed its initial $1-billion commitment for a shipyard here, the same year when SBMA was named the country’s biggest investment-promotion agency.

The next year several big-ticket projects, including Hanjin’s expansion worth close to $700 million, beefed up Subic’s investments harvest in 2007 to $1.71 billion.

As the global economic slowdown rolled on last year, however, the SBMA suffered a significant setback when investments plunged to a mere $249 million, or 85 percent less than the 2007 record.

Still, Arreza said the situation is not as worse as it may seem.

Noting that Subic’s cumulative investments of $5.8 billion as of 2008 have already exceeded the original 2010 target of $5 billion by 116 percent, Arreza expressed optimism that the remaining $1.7 billion could be generated in the next two years to round off SBMA’s enhanced 2010 target of $7.5 billion.

He pointed out, however, that in order to pursue this goal the SBMA and Subic locators “should change the name of the game” in four areas: logistics, manufacturing, tourism and services, specifically in business-process outsourcing (BPO) and knowledge-based industries.

From what is essentially a “bonded warehouse operation” with limited connectivity and ship calls far in between, Subic should be developed as a viable regional transshipment center, with daily ship calls to major regional logistics hubs, Arreza said.

This, he pointed out, could be achieved by attracting heavy port users in Central Luzon, implemen-ting 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 manufacturing, Arreza emphasized the need to establish stronger industry clusters to capture greater value, greater investments in R&D, and the development of additional industrial estates along the Subic-Clark corridor. He added Subic must also capitalize on Hanjin’s presence to build a strong maritime industry.

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 Free Port.

Arreza also noted that Subic still “has no significant presence in the burgeoning Philippine BPO market.”

To bring Subic at the forefront of knowledge-based industries, he said that the SBMA would provide additional incentives to pioneering companies, work with local schools to enhance curriculum, develop an IT park within the free port, and develop facilities for WiMax (Worldwide Interoperability for Microwave Access) high-speed wireless data technology to serve as a platform for new businesses and services within the zone.

Arreza also bared plans for the SBMA’s outward push to Olongapo City, Zambales and Bataan as areas for development increasingly become limited within the fenced-in area of the free port.

Arreza said Olongapo would be ideal for commercial establishments, housing areas 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.

In the same presentation to Subic business locators, Arreza said the SBMA is also aiming to see direct employment climb to 150,000 in 2010, from the 2008 year-end record of 87,502.

On the other hand, the agency targets an annual export figure of $2 billion by 2010, from Subic’s $719 million record posted last year. Written by Henry Empeño / Business Mirror

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