SUBIC BAY FREEPORT—The business community here has objected to the imposition of new service fees this month by the Subic Bay Metropolitan Authority (SMBA), but the agency said it is dead set on pursuing its latest revenue-generating measure.
SBMA Chair Roberto Garcia said he would impose the Common Use Service Area (Cusa) fee, which intends to recover SBMA’s expenditures for municipal services such as street cleaning, street lighting, fire fighting and law enforcement inside the free port. The SBMA has been hobbled by huge loans and debts.
“We’ve already published the policy [in nationally-circulated newspapers], and after 15 days, [Cusa] will be implemented,” he said.
He said only a court order would prevent the SBMA from enforcing the fee.
Garcia had come under fire from free-port businessmen, who said the fee may not be legal because service fees are theoretically embedded in the free port’s standard fee structure.
But the SBMA chair said other developers charge Cusa fees. “The SBMA’s Cusa fee will affect only the direct lessees—meaning those who have direct lease agreements with the SBMA. But of course, they can pass it on to their sub-lessees,” he said.
Garcia also announced that objections have compelled the SBMA to modify the Cusa fee structure. This time, locators would be charged two percent of the appraised value of their leased land, or 20 percent of their monthly lease rental, whichever is higher.
Free-port residents would be charged P1,200 per month, which would also cover garbage fees that the SBMA had been collecting. Garcia described the modifications as “a drastic reduction to the Cusa fee.”
“With this revised proposal, at 100-percent collection, [the SBMA] would generate only P170 million annually. That’s a 50-percent reduction from the original scheme. The rest [of the service cost] will be subsidized by the SBMA. I’ve received expressions of support mainly from residents. Some of the locators have also expressed support but that’s the exception,” he said.
Timothy Desmond, president of the Ocean Adventure and one of the Cusa fee’s most vocal critics, said: “Our position is unchanged despite the significant reduction in the revised fee. The Cusa, in principle, is unacceptable because it breaches the agreement that was made with investors under Republic Act No. 7227 (the law that created the Bases Conversion and Development Authority).
This ‘solution’ punishes the ones who have been [shouldering] the SBMA to date with successful businesses, which have survived despite the SBMA’s inherently inefficient system.” He described the Cusa fee as “an illegal tax.”
“Ocean Adventure’s objective here is not just avoiding a fee. Our larger objective is to poke, prod, encourage and support a process of general reform within the SBMA. The SBMA [operating in a] business as usual [fashion] is dead. The locators see it, the banks see, incoming investors see it. I know that Chairman Garcia sees it,” Desmond said. “The Cusa won’t fix it. It enables a moribund system to continue. It is time to set the Cusa aside and work together for real solutions.” In a letter to Garcia and the SBMA board, Desmond addressed the agency’s financial concerns.