Subic pins hope for growth on domestic tourism

Philippine Daily Inquirer
Wednesday, January 27, 2010

SUBIC BAY FREEPORT—Local businessmen and top freeport officials are counting on the tourism sector to boost revenue and ensure growth in this business hub amid the global economic downturn.

Despite the bleak prospects due to the crisis and the series of calamities that hit the country last year, the economy of Subic and its surrounding communities in Zambales and Bataan has been buoyed by a steady influx of mostly local travelers, said SBMA Administrator Armand Arreza.

“(Subic has become) a major tourist destination for locals. This has resulted in giving (businesses in the freeport) tremendous opportunities for growth. We will capitalize on that,” he said.

He said major tourism-related projects in the pipeline this year were the $175-million leisure facility in Subic’s Cawag area that would be undertaken by Subic Neocove Corp., a Korean-led consortium; the Ocean 9 casino and hotel complex by Philkor Neorex, and Ayala Land’s $21.4-million retail and commercial center here.

“Ayala Land’s entry as an investor in Subic is especially welcome. We have started moves in pushing the boundaries of the freeport zone into Olongapo City—with a commercial center and manufacturing facilities in Bataan. The challenge for us is to include these communities as part of the freeport zone,” Arreza said.

Antonino Aquino, ALI president and chief executive officer, said fiscal incentives like Subic’s 5-percent gross income tax, if successfully extended to the 7,000-square-meter Olongapo City Central Business District (CBD) Triangle, would set the stage for robust trade in the area.

He said Subic freeport’s tax and duty-free incentives will be the “lifeblood of this development.”

Charles Susung Kim, Philkor Neorex’s president, said Subic’s facilities and infrastructure remained one of its attractions to prospective investors.

“(Philkor Neorex) will become a major investor in Subic in the next few years. Our casino facilities will be complemented by the other establishments here and the Subic airport will make it easy for international guests to get here,” said Kim.

Arreza said this trend of the tourism sector acting as Subic’s growth driver would continue and become stronger in the coming years.

However, he said growth in the manufacturing and logistics sectors had been flat. “There has been low demand in Europe for electronic devices and computer hardware manufactured here. Fortunately, there have been no massive layoffs. But there has also been no expansion in these sectors,” he said.

He said these sectors were linked and would likely continue to be so until the global economy has recovered. “When manufacturing companies do not get orders for their products, there is nothing to transport, nothing to deliver, and no revenue to be generated,” he said.

Arreza said even the Korean shipbuilding giant Hanjin, the single biggest investor and employer in the area, had been affected by the steep drop in orders for Subic-made products from overseas.

“They have put their expansion lines on hold although growth is still stable this year and the next. They are protected by the long delivery schedules in the shipbuilding industry. Their order books are full until 2013—with 37 committed orders for ships,” he said. Robert Gonzaga, Inquirer Central Luzon

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