SBMA unit may close due to financial woes

SUBIC BAY FREEPORT — Freeport Service Corp. (FSC), a subsidiary of the Subic Bay Metropolitan Authority (SBMA), may have to close because of a financial crisis, the new company president revealed recently.

Antonio Rex Chan, who was appointed last month as FSC president by President Arroyo, said “urgent measures” are necessary now to prevent the closure of the 15-year old company that provides services to both the SBMA and business locators here.”

At the root of the financial crisis, Chan said, are a deficit of P7 million incurred by the firm as of January 2008, and more than P70 million in outstanding loans and debts that have to be paid.

“Preliminary findings and assessment on the state of affairs at FSC reveal an alarming situation — a crisis that has already caused immense injury to government interest,” Chan said in a four-page memorandum, a copy of which was obtained by The STAR.

“If not appropriately and urgently addressed, it shall result in irreversible damage to the company, adversely affect its sustainability, and lead to a situation that may even cause its closure,” he added.

Chan said that because of the financial crisis, the monthly subsidy of P6 million from the SBMA is now being spent for payroll, instead of for the upkeep of SBMA facilities under contract with FSC.

Chan pointed out that the company’s administrative plantilla consisting of 721 employees “is excessive.”

He noted that the 531 regular employees, 14 consultants, and almost 200 contractuals and temporary hires “do not all contribute to revenue generation or enhancement of the company’s operations.”

Instead, these “non-profit personnel significantly consume power, water, office space, fuel, administrative service, depreciation, and other expense items aside from their salaries and bonuses,” he added.

Another concern raised by Chan is the number of managers in the company, which has reportedly increased to 15 today from the previous six.

Calling their salaries “substantive,” he said the perks given to managers — free car fuel, maintenance and driver; reimbursement expenses that are “hardly related to their functions”; and free communication equipment and cell phone charges, among others — contribute greatly to the drain in the resources of the company.”

 Chan pointed out the FSC used to be a profitable venture, providing manpower and services to investor companies, as well as managing facilities like the JEST Camp, a popular tourism attraction, and the Forest Hills housing area, and Dungaree Beach, which it privatized in 2006.

Chan said, however, that as of now the only significant sources of revenues for the firm are the two gas stations that FSC has set up three years ago.

“The tourism facilities are seasonal at best,” he added.