Subic investments near $6 billion since US turnover

SUBIC BAY FREEPORT , Philippines  — Investments registered by the Subic Bay Metropolitan Authority (SBMA) drew closer to the $6-billion mark since the former US naval base was turned over to the Philippine government 17 years ago.

SBMA official said as of Nov. 15, the agency has notched a cumulative total of $5.925 billion in investment commitments since it was created in 1992 to manage and operate the Subic Bay Freeport Zone.

In today’s exchange rate, that amount is equivalent to P276.79 billion, or an average of P16.28 billion each year in investment pledges over the past 17 years.

SBMA administrator and chief executive officer Armand Arreza told The STAR, that the Subic Bay Freeport “continued to defy the odds with positive performance in investment generation, job creation and revenue production even as the global economy wobbled starting last year.”

This has led the SBMA to embark on a new mission to expand into nearby areas and develop new economic zones there, he added.

Arreza pointed out that despite growing economic uncertainties in the first quarter of 2009, SBMA managed to squeeze in a total of $31.72 million in new investments even as major economies suffered major income reversals.

Thereafter, Subic followed it up with $60.46 million in the second quarter, $41.12 million in the third quarter, and $26.45 million from October to the first half of November.

“We have stayed in the black all along despite the recession,” Arreza said, pointing out that as of Nov. 15 Subic has a total of 1,301 investment projects approved by the SBMA board.

“The continuing entry of investors also revved up employment generation, so that as of September Subic had a total active workforce of 86,229. This represents an increase of 3.36 percent over the September 2008 figure of 83,428, and that’s despite the recession that affected quite a number of companies here,” he added.

Arreza said most of the Subic firms affected by the downturn had since recovered, while other companies, fueled by the resurgence of the electronics sector, “have been, in fact, undertaking expansion projects.”

According to SBMA data, most of the investments recorded in the Subic Bay Freeport Zone have been generated under the administration of SBMA chairman Feliciano Salonga and Arreza that began in September 2005.

The total investment commitments generated in this period amounted to $3.55 billion, or more than 52 percent of the cumulative amount.

Subic’s biggest year-on-year investment was made in 2007 when a total of $1.71 billion was approved by the SBMA. In 2006, Hanjin pledged its initial $1-billion commitment for its shipyard project, cranking Subic’s investment generation that year to a total of $1.44 billion.

Arreza said that in the next few years, the SBMA will be focusing on projects that would expand the physical boundaries of the Subic Bay Freeport and allow the SBMA to generate more investments.

“This will be the new mission for the SBMA,” Arreza said. “We have already exceeded by more than four times the number of jobs lost in Subic when the US Navy left in 1992. Now we’re looking at bringing development outside of the free port, to the communities that have helped nurture the Subic dream since 1992.”

Arreza had earlier proposed the creation of a P2-billion fund to allow both Subic and the neighboring Clark Freeport to expand and develop new economic zones in nearby areas.    — With Ma. Elisa Osorio