february 2011 | 3
The Business Paper of the New Economic Corridor
State of the Freeport Address
Insightful. Promising. Pro-Active
he 6th State of the Freepor t Address ( SOFA) presented by Subic Bay Metropolitan Authority (SBMA) Administrator and CEO Armand C. Arreza can be summarized into three words: Proactive. Insightful. And Promising. Compared to his past SOFA’s, Arreza emphasized early on in his 40-minute speech —- the “moral purpose” in which SBMA should now adhere to — anchored on working together hand-in hand with the different stakeholders with clarity, transparency and honesty under the present Aquino administration. Arreza quoted a recent statement of President Aquino before Philippine business leaders: “‘Daylight, the way forward is to move together in the broad light of day where everything we do and how we do it is clear, honest, and transparent.’ In a nutshell, Administrator Arreza’s SOFA provides everyone a sneak preview, so to speak, of what is really in store not only for the stakeholders in Subic but likewise, the Free port’s role in helping boost the country’s financial and economic gains from hereon. Attended by executives of top companies based in Subic including locators, local government leaders and Freeport workers, officials of regional government agencies in Central Luzon, SBMA employees and other officials, the annual event presented by the Subic Bay Freeport Chamber of Commerce (SBFCC) held last February 15 at the jam-packed Subic Bay Freeport Convention Center. The following and other separate articles in this special issue of News Central are excerpts of the SOFA including highlights of the Administrator’s performance report:
Investments The most basic or fundamental gauge of the state of the Freeport and the performance of the Subic Bay Metropolitan Authority (SBMA) as an investment promotion agency is the flow of investments and its power to entice more investors. Arreza made this statement for the opening salvo of the annual SOFA as he presented the key performance indicators of the country’s premium Freeport zone during the first part of
the event on behalf of SBMA Chairman Feliciano G. Salonga who was struck down with flu at the time of the much-awaited yearly report. “I am pleased to report that cumulative investments in the Freeport grew by 20 percent last year – from 5.9 billion US dollars in 2009 to 7.16 billion in 2010,” Arreza said. “This boosted cumulative investments in Subic by more than a billion dollars.” The number of approved new projects for 2010, however, dropped by 43 percent – from 201 projects in 2009 to only 115 last year. This brought the cumulative approved projects in the Freeport to more than 1,400. “So, what we lacked in numbers, we definitely more than made up in terms of quality investments,” Arreza said. He said that the drop in the number of approved new projects could be attributed mainly to the lack of a quorum in the SBMA Board since the issuance of E.O. 2, which as we all know, affected 12 out of our 15
board members. Arreza said that aside from having a quorum in the SBMA Board, another good news is the overwhelming increase of more than four (4) times – or 486 percent, to be exact – in the amount of committed investments generated last year, as compared to 2009. “This, despite the decline in the number of investment projects, as I have mentioned earlier, “ he said.
Top 10 investments Leading the pack of top 10 investments is Korean investor M. Castle Philippines, now called Resom Resort Philippines, with an investment pledge of $1 billion. Resom Resort Philippines aims to develop a 590-hectare property at the Minanga area in Morong, Bataan that will combine Resom’s three existing resort facilities in Korea – namely Ocean Castle, Spa Castle, and Mountain Castle – into a single integrated world-class recreational leisure resort facility.
Next is the Sunnew-Subic Investments Limited from China, which has committed $75 million for the establishment of a 25-wind turbine farm that would generate some 50 megawatts of power. Number 3 top investor is Subic Bay Town Center, followed by a tie between Alubat Aviation Composites and Vapco International Corporation in the fourth slot. Next are Sands of Triboa Resorts as No. 5; Subic Bay Brands and Lifestyle Retails Concept, Inc. as No. 6; and Fertuna Holdings Corporation as No. 7. Fertuna Holdings is an affiliate company of Puregold Duty Free, which plans to embark on a partnership agreement with Ayala Land, Inc. for the development of the Main Gate Area. The company will also serve as the anchor supermarket tenant of the proposed Harbor Point Mall of Ayala and will re-develop the existing Park and Shop Terminal of the Freeport. Ranked No. 8 investor for 2010 is
Holy Land Subic Foundation, Inc.; followed by Udenna Management and Resources Corporation and San Bernardino Shores Beach Resort Corporation, for the ninth and tenth slots, respectively. “We value the decision of these investors to bring their businesses here and assure you of our continuous effort at being a truly customerfocused agency,” Arreza said. Local investments in 2009 comprised almost 60 percent of total committed investments that year. And this compensated for the 63 percent drop in foreign direct investments from 2008 to 2009. For 2010, a different scenario unfolded. FDIs or foreign direct investments made up 92 percent of investment pledges that came in last year, while local investments accounted for the balance of eight (8) percent. And this despite that SBMA signed up more local investment projects last year. Arreza acknowledged the top 10 foreign investors for 2010, led by the same top three investors in the overall category – namely, M. Castle, Sunnew, and Alubat Aviation and Vapco. Next in line are Safehull Marine Technologies, Advance Subic Screw, Chinmel Metal Manufacturing, and Aviation Concepts Holdings – which inaugurated its 100,000-square foot hangar facility at the Subic Bay International Airport last month. The rest of the top ten (10) FDIs Misung Subic, International Armoring Corporation Asia, Nova Freeport Resources, and M-com Subic. The investment pledges of these top ten (10) FDIs total more than 1.1 billion dollars. Arreza likewise acknowledged the top10 local investors who have pledged a total of more than 77 million dollars. These are Subic Bay Town Center, Sands of Triboa Resorts, Subic Bay Brands and Lifestyles Retails Concept, Fertuna Holdings, Holy Land Subic, Udenna Management and Resources, San Bernardino Shores Beach Resort, Carworld Subic, Palm Horizon Gateway Subic, and CWSubic Bay Development. “To both our foreign and local investors, we re-affirm our resolve to continue making the Freeport worthy of your trust and confidence,” Arreza said.
Investors welcome new members of the SBMA Board
ight new members of the Subic Bay Metropolitan Authority (SBMA) Board of Directors who have been appointed by President Benigno “Noynoy” Aquino last January and early this month are all set to keep the ball rolling and carry forward the economic development of Subic Bay Freeport. SBMA Administrator and CEO Armand C. Arreza said that the SBMA Board is now ready to resume the long-stalled sessions with the appointment of eight new members to tackle about 200 pending projects and investment proposals submitted to the SBMA. “This concern was brought to President Aquino’s attention by the Chamber itself and had been adequately addressed with the appointment of our new directors. So, my
thanks to the Chamber for helping us out in this matter,” Arreza said. Officers and members of the influential Subic Bay Freeport Chamber of Commerce (SBFCC) welcomed the appointment of the new members of the SBMA Board who were introduced during the State of the Freeport Address. According to SBFCC president Danny Piano, business locators in Subic are thankful that President Aquino heeded their request to fill the void left by the unseated board members. The new members of the SBMA Board are: Benjamin Antonio III, a professional manager with an extensive international experience and a proven track record in Operations, Information Technology, Business Process Management and Risk Management;
Philip Camara, the former chairman of the Sectoral Regional Council on Economic Development, RDC Central Luzon, which is a regional government/private sector development coordination body. Camara is also a trustee of the Haribon Foundation, a non-stock, non-profit environmental organization that has pioneered in wildlife protection and conservation in the Philippines. Gerald Sam del Rosario, a young and innovative operations executive with a fine track record in exceeding profitability goals, turning around underperforming business units, and driving up revenues and market share. Ramon Diez Sesdoyro, a broadcast media veteran and professional who was undersecretary of the Office of the Press Secretary during President Ramos’s term until he was appointed
as general manager of the People’s Television Network or Channel 4. As general manager of PTV 4, Diez succeeded in paying off all the station’s obligations, leaving the governmentowned media outlet in the black by two million pesos at the end of his service in 1998. Norberto Sosa who has extensive experience and expertise in marine and terminal operations as marine manager for Pilipinas Shell Petroleum Corporation for 18 years. Atty. Bienvenido Benitez, a distinguished lawyer who has not only succeeded in resolving a squatter problem in Las Piñas through community empowerment and democratic participation but who, as an abstract artist, has also presented four shows. Francis Garcia, representing Hermosa, Bataan. Garcia is an “old new”
member of the Board, as the SBMA had this Cornell University alumnus and hi-tech guy with us from March to August last year. Roberto Garcia, a topnotch business executive who upon retiring from Motolite and Oriental Corporation had made the company the largest battery manufacturer in ASEAN and one of the most integrated battery manufacturers in the world, producing on its own almost every component needed in the assembly of a battery. “I am sure these eight gentlemen have been appointed by President Aquino by virtue of their varied expertise and multi-faceted backgrounds,” Arreza said. These will definitely come in handy in tackling an equally diverse gamut of concerns that are presented to the SBMA Board.