Finally, economic hubs get needed attention

FOR 20 years, the Clark International Airport inside the Clark Freeport had been underutilized until President Duterte identified it as a solution to the air traffic congestion at the Ninoy Aquino International Airport. TONETTE OREJAS

UNTIL President Duterte announced in his State of the Nation Address on July 25 his plans to develop the special economic zones, particularly Clark Freeport, in Central Luzon, nothing had excited most people living in and around these former base lands-turned-economic-hubs because past presidents barely explored their potentials.

In his speech, Mr. Duterte said he was pursuing “different approaches … to decongest the Ninoy Aquino International Airport (Naia), including the possible transfer of general aviation to the Clark International Airport or CRK.” He also directed agencies to relocate flights to CRK and to build a “one-stop shop” clearinghouse there for migrant workers.

But these plans hinge on how soon the government can put in place a fast rail system that would connect Clark airport to major access points of Metro Manila.

The announcement was hailed as a “welcome development” by business leaders in the region.

Businessman Renato Tayag Jr., who is based in Angeles City in Pampanga province, said the development of the 4,500-hectare main section of the Clark Special Economic Zone, the 36,000-ha Sacobia subzone and the 9,500-ha Clark Green City would be “good for the whole country, not just for us residents north of Metro Manila.”

The President also set the tone for how the major free ports would thrive under his administration. For example, his plan to continue the construction of a connector between the South Luzon Expressway and North Luzon Expressway was immediately executable, according to travel and tourism leader Carmen Tayag-McTavish, also of Angeles, which is beside the free port.

Clark International Airport Corp. (CIAC), which oversees CRK, is also upbeat about Mr. Duterte’s order to build a railway connecting the airport to Metro Manila. As early as 1994, Clark was declared the “future site of a premier Philippine international airport” through an executive order issued by then President Fidel Ramos, who also created CIAC.

Tossed around

But CRK was not a priority under the succeeding administration of President Joseph Estrada.

Still, during the next administration of President Gloria Macapagal-Arroyo, CIAC was like a ball tossed around. Arroyo made CIAC a subsidiary of the Bases Conversion and Development Authority (BCDA) through an executive order issued in March 2003, then a subsidiary of Clark Development Corp. (CDC) through an executive order in April 2003 and returned as a BCDA subsidiary through another executive order in April 2008.

The next president, Benigno Aquino III, put CIAC under the Department of Transportation and Communications in 2011.

Angeles Mayor Edgardo Pamintuan said the “lackadaisical” approach to the development of Clark had been “disastrous to the country’s aviation with delayed flights as long as three to four and even seven hours.”

“The decongestion of Naia is just the short-term goal. The strategic goal is to develop Clark as part of the continuing comprehensive development of the country,” said Pamintuan, who is also president of the League of Mayors of the Philippines.

Another “necessity part” of the development of Clark was the railroad system from Southern Tagalog and Metro Manila to Central Luzon, he said. “It will facilitate speedy transport of passengers and goods,” he added.

According to the mayor, the one-stop shop for overseas Filipino workers in Clark is needed “and the President has the political will and foresight to include this in his priority projects.”

More workers

At Clark Freeport, the 829 registered locators employ at least 87,756 workers, CDC records showed. The number of employees is three times that of workers when the United States managed the air base there until 1991.

Subic Bay Freeport, a former American naval station in Zambales province, has also done well in base conversion. The 1,500 locators there keep a workforce of 104,000 workers, data from the Subic Bay Metropolitan Authority (SBMA) showed.

The first economic zone in the Philippines, the former Bataan Export Processing Zone, is now the Freeport Area of Bataan (FAB), which created over 25,000 jobs in 2015 with more companies opening up and spawning thousands of employment inside the free port.

The number of FAB employees hired by registered locators and manpower agencies increased to 25,803 in 2015, or 28.91 percent higher than the 20,017 workers in 2014.

Since its conversion from a US military facility into a self-sustaining tourism and investment hub northwest of Manila, Subic Bay Freeport continues to breathe life into the local economy.

SBMA chair Roberto Garcia said the business community in the free port had transformed vacant parcels of land into bustling commercial establishments and hi-tech manufacturing companies that produce high-value electronic components used by global brands.

The authority increased its capital expenditures in 2015, allocating P302.5 million of its P800-million Capex to fund eight major infrastructure projects.

It improved the road networks at the Naval Supply Depot area, renovated the Subic Bay Exhibition and Convention Center, and built a sentry booth and a medical-dental clinic at the Aeta tribal village in Hermosa town in Bataan.

“Subic is not only the first free port but the largest and most progressive in the country, and we want to keep it that way,” Garcia said.

Embarrassing

The shortage of funds in previous years had led to some embarrassing situations, he admitted, recalling the visit of a group of investors one rainy day and water started to drip from the ceiling of his office.

Sen. Richard Gordon, the former SBMA chair and administrator, saw more than embarrassment in what he described as the stalled development of the port. “For too long, the government has wasted the [potential] economic impact [of] Subic and Clark airports, as well as Subic’s sea port, to generate opportunities in jobs and investments for Luzon by its failure to maximize these major infrastructure assets,” he said.

Garcia agreed. “Our airport equipment is outdated. Senator Gordon bought this equipment in 1996 and that’s 20 years ago. But we have already lined up the necessary equipment that we will purchase for our airport here,” he said.

Subic had not been competitive in attracting investors for aircraft maintenance, repair and overhaul because of expensive fuel cost in the country, he said. He pointed out that SBMA had allocated P245 million for upgrading the airport facilities.

Military investments

“The reason I haven’t purchased the equipment is because I’m still waiting for the [Philippine] Air Force (PAF),” Garcia said. The PAF will rehabilitate a 13-ha portion of Subic Bay International Airport (SBIA), where shipping giant Federal Express used to operate, as part of expanded military base.

According to Garcia, under the memorandum of agreement between SBMA and the Department of National Defense (DND), the upgrade of the airport facilities will be shouldered by the DND.

Garcia said the Armed Forces of the Philippines would also renovate some of the old US military barracks, including dilapidated military houses located at the Upper Marine Amphibious Unit Camp to house AFP personnel.

Earlier, he had described Subic as the military’s forward operating base because it is near the disputed Panatag Shoal, also known as Scarborough Shoal or Bajo de Masinloc. The shoal, 222 kilometers (120 nautical miles) west of Subic Bay, was the site of the tense stand-off between the Philippines and China in 2012.

Global logistics center

Garcia also announced that a P60-billion investment project to be implemented by an Australian firm is expected to modernize the airport, pushing Subic into the ranks of top global logistics centers today.

Asian Institute of Aviation (AIA) will occupy 7 ha of land near SBIA and will build hangars and food processing stations for its intermodal logistics business. An Australian firm will buy into AIA for the new operations. The project is expected to generate 800 jobs.

Subic’s seaport has remained untapped and underutilized despite having adequate infrastructure and facilities, according to experts.

The utilization rate of Manila ports is 79 percent while Subic is only 6.2 percent, based on 2013 records from the National Economic and Development Authority.

But in November last year, the Port of Subic saw the unloading of the 100,000th 20-foot equivalent unit cargo container by Wan Hai Lines. Roberto Locsin, Subic Bay International Terminal Corp. general manager, said the container van, which came from Kaoshiung, Taiwan, was for delivery to United Auctioneers Inc., a heavy equipment trader.

Subic free port has gradually attracted local and foreign visitors with its eco-tourism destinations, such as triple-canopied rain forests and mangroves, water parks, mountain trails and nature-based theme parks and bird-watching sites.

The Department of Tourism (DOT) has recognized the port as the top tourist destination in Central Luzon for the past two years. More than 4 million tourists visited Subic in 2015, growing by 30 percent over the tourist arrivals in 2014.

Bataan dragon

Touted as an emerging manufacturing hub and economic dragon in the country, FAB in Mariveles town in Bataan is being managed by the Authority of the Freeport Area of Bataan (Afab) and is known to host companies that produce high-end bags, garments, fashion accessories, and apparel.

Afab generated P84 billion worth of investments in the first half of 2014, which was higher than the P60.5 million it posted in the same period in 2013. It posted a double-digit growth rate of 32.5 percent in the fourth quarter of 2015 in terms of investment pledges.

Its chair, Deogracias Custodio Jr., said the investment pledges “proved the authority’s perseverance to contribute to the growth of local economy and generate more jobs.”

International and local companies in FAB still need over 2,600 employees as new companies start operations and existing locators expand bases.

Afab officials said the newly registered locators in 2015 were expected to open close to 5,000 jobs in the next three years.

As of December last year, there were 114 registered locators in the FAB. These included Korean, Taiwanese, Chinese, American, Japanese, British, Bahrainese, French and German businesses.

Ruperto Cruz, chair of the multisectoral coalition Pinoy Gumising Ka Movement, said Mr. Duterte should deserve all the support for his plans to develop the economic zones, particularly Clark Freeport.

“We’ve been calling for the full development of Clark and the airport. We’ve seen presidents come and go. I hope President Duterte is really serious,” Cruz said.