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Transcript of SOFA 2011
STATE OF THE FREEPORT(PART 1)By RADM Feliciano G. Salonga, PCGASBMA Chairman / Head of Agency
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
Key Performance Indicators (2010 vs. 2009)
CUMULATIVE INVESTMENTS(1992 - 2010)
Year Committed Investments(Cumulative)
2010 7,167.88 B
2009 5,958.01 B
Up by20%
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
Key Performance Indicators (2009 vs. 2010)
INVESTMENT PROJECTS
Year
No. ofApproved Projects
for the Year
Cumulative No. of Approved
Projects (1992 – 2010)
2010 115 1,463
2009 201 1,348
Down by
43%
Up by
8.5%
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
Key Performance Indicators (2010 vs. 2009)
COMMITTED INVESTMENTS FROM NEW PROJECTS
Year Committed Investments
2010 US$1.210 B
2009 US$0.206 B
Up by486%
METROPOLITAN AUTHORITYSUBIC BAY
Rank Company Committed Investments (US$)
Country of Origin
1 MCastle Philippines 1,000,000,000.00 KOREA
2 Sunnew-Subic Investments Ltd. 75,000,000.00 CHINA
3 Subic Bay Town Center Inc. 36,425,969.57 PHILIPPINES
4Alubat Aviation Composites Philippines 15,000,000.00 GERMANY / UK
Vapco International Corporation 15,000,000.00 JORDAN / PHILIPPINES
5 Sands of Triboa Resorts 14,379,363.79 PHILIPPINES
6 Subic Bay Brands & Lifestyles Retails Concept, Inc. 5,946,291.56 PHILIPPINES
7 Fertuna Holdings Corp. 5,356,760.23 PHILIPPINES
8 Holy Land Subic Foundation, Inc. 5,339,598.46 PHILIPPINES
9 Udenna Management & Resources Corp. 3,220,000.00 PHILIPPINES
10 San Bernardino Shores Beach Resort Corp. 2,210,480.91 PHILIPPINES
TOTAL $ 1,177,878,464.53
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
2010 Over-all Top 10 New Investments METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
2010 Foreign and Local Investments
LOCAL66 New Projects
(57%)
FDIs49 New Projects(43 %)
Approved Projects
Local$87.99(7%)
FDIs$1,121.88
(93%)
Committed InvestmentsIn US$ Million
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
2010 Top 10 FDIs
RANK COMPANY COMMITTED INVESTMENT (US$) COUNTRY OF ORIGIN
1 MCastle Philippines 1,000,000,000.00 Korean
2 Sunnew-Subic Investments Ltd. 75,000,000.00 China
3Alubat Aviation Composites Philippines 15,000,000.00 Germany / UK
Vapco International Corporation 15,000,000.00 Jordan / Philippines
4 Safehull Marine Technologies, Inc. 2,131,287.30 Taiwan / Philippines
5 Advance Subic Screw Inc. 1,500,000.00 Taiwan6 Chinmei Metal Mfg. Inc. 1,450,000.00 Taiwan7 Aviation Concepts Holdings 1,100,000.00 USA / Canada
8Misung Subic, Inc. 1,000,000.00 China 60% / Canada
20% / Philippines 20%International Armoring Corporation Asia 1,000,000.00 USA
9 Nova Freeport Resources, Inc. 879,101.30 Korea
10 Mcom Subic Corporation 867,000.00 Taiwan
TOTAL US$ 1,114,927,388.60
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
2010 Top 10 Local Investments
Rank COMPANY COMMITTED INVESTMENT (US$)
1 Subic Bay Town Center Inc. 36,425,969.57
2 Sands of Triboa Resorts 14,379,363.79
3 Subic Bay Brands & Lifestyles Retails Concept, Inc. 5,946,291.56
4 Fertuna Holdings Corp. 5,356,760.235 Holy Land Subic Foundation, Inc. 5,339,598.46
6 Udenna Management and Resources Corp. 3,220,000.00
7 San Bernardino Shores Beach Resort Corp. 2,210,480.91
8 Carworld Subic, Inc. 1,895,000.00
9 Palm Horizon Gateway Subic, Inc. 1,601,879.54
10 CW-Subic Bay Dev’t ., Inc. 1,499,892.86
TOTAL US$ 77,875,236.93
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
Employment (2010 vs. 2009)
Projected Employment from New Projects
Year No. of Workers
2010 8,050
2009 7,202
Up by11.77%
Total Active Workforce
Year No. of Workers
2010 88,450
2009 87,226
e p o r t A
Up by1.40%
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
2010 Total Active Workforce by Sector
SERVICES40,308(45%)
SHIPBUILDING/MARINE RELATED
SERVICES25,722(29%)
MANUFACTURING15,037(17%)
CONSTRUCTION6,837(8%)
DOMESTIC HELPERS/
CARETAKERS546(1%)
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
HHIC-Phil Manpower Plan
MANPOWER PLANTOTAL
25,000
20,000
15,000
10,00016,000
17,000
20,000
24,00025,000
YEAR2008 2009 2010 2011 2012
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
2010 Top 10 Employers
Rank Company No. of Workers % Share
1 Greenbeach Powertech, Inc. (KCTech, Inc.) 2,954 3.34%
2 Nidec Subic Phils. Corp. 2,279 2.58%3 Sanyo Denki Philippines, Inc. 2,252 2.55%4 Metrobay Corporation 1,603 1.81%5 Freeport I-Tech Corporation 1,567 1.77%6 Binictican I-Tech Corporation 1,517 1.72%7 Subic Shipbuilder Corporation 1,494 1.69%8 Redondo I-Tech Corporation 1,485 1.68%9 Kalayaan I-Tech Corporation 1,454 1.64%
10 Redondo Baytech Corporation 1,296 1.47%
TOTAL 17,901 20.24%
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
2010 Ten Outstanding Freeport Workers
Name Company
AQUINO, LARRY F. SBMA (HUMAN RESOURCE MGT. DEPT.)
CASTRO, JEAN V. NICERA PHILS., INC.
CATIIS, NEDELYN Q. SBMA (HUMAN RESOURCE MGT. DEPT.)
LABADAN, BENAMOR O. SUBIC BAY MARINE EXPLORATORIUM
MALLEN, JESUS VENER M. PHIL. COASTAL STORAGE & PIPELINE CORP.
MULLIS, ELVIRA R. SBDMC, INC.
ROBERTO, FRANCISCO P. SUBIC BAY MARINE EXPLORATORIUM
SADORA, ALFREDO T. PHIL. COASTAL STORAGE & PIPELINE CORP.
SAN GABRIEL, MARK F. SUBIC WATER & SEWERAGE CO., INC.
TAMAYO, MARISSA C. NIDEC PHILS., INC.
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
Human Resource Development
Since 2007, 22,000 workers(welders, painters, pipe fitters, electricians, machinists,outfitters etc.) have been trained in this Center.
A continuing advocacy for needed adjustments in school curricula to produce graduates with skill sets that match the current demand of employers
Annual Labor Bulletins on training programs extended by NGOs and GOs, as well as certain training programs, as requested and proposed by proponents
A continuing advocacy fadjustments in school cuproduce graduates withthat match the current deemployers
Annual Labor Bulletins onprograms extended by NGOs, as well as certain trprograms, as requested andproposed by proponents
HHIC’s Skills Development Center
Labor Matching Congress Training Program Announcements
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
Exports and Imports (2010 vs. 2009)
2010 2009 Variance
US$ 1.345 B US$ 1.079 B US$ 0.265 B
Export FOB Value
2010 2009 Variance
US$ 3.482 B US$ 2.243 B US$ 1.239 B
Import FOB Value
Up by25%
Up by55%
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
2010 Top 10 Exporters
Rank Exporters FOB Value (US$)
1 HHIC-Phil 725,835,150.24
2 Sanyo Denki 103,201,977.72
3 Wistron Infocomm (Phils.) 75,321,518.40
4 Hitachi Terminals Mech.Phils.Corp. 57,703,481.04
5 Tong Lung (Phils.) Metal Industry 53,079,492.70
6 Juken Sangyo Phils. 53,020,334.27
7 Tapu Corporation 27,757,940.24
8 Nicera Philippines, Inc. 22,217,042.05
9 Cano Subic Corp. 20,845,931.17
10 Nidec Subic Philippines Corporation 18,077,718.94
TOTAL 1,157,060,586.77
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
2010 Top 10 Importers
Rank Importers FOB Value (US$)
1 Sanyo Denki Philippines, Inc. 606,479,796.92
2 PTT Philippines Trading Corporation 424,554,637.60
3 HHIC-Phil., Inc. 381,383,155.57
4 Koryo Subic, Inc. 368,841,159.19
5 Nicera Phils., Inc. 240,847,884.37
6 Nidec Subic Philippines Corporation 224,247,107.35
7 Koushin Mfg. Phils., Inc. 183,333,375.84
8 Wistron Inforcom ((Phils.) Corp. 156,956,668.63
9 Micro Dragon Petroleum,Inc. 138,230,251.00
10 Challenger Aero Air Corporation 67,618,350.92
TOTAL 2,792,492,387.39
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
Seaport Performance (2010 vs. 2009)
2010 2009 Variance
PhP 414,538,132.99 PhP 472,855,618.27 PhP 58,317,485.28
Revenues
2010 2009 Variance
PhP414,538,132.99 PhP469,282,229.49 PhP 54,744,096.50
Revenues vs. Forecast
Downby
12%
Downby
12%
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
Seaport Performance (2010 vs. 2009)
Origin 2010 2009 Variance
Foreign 779 939 (160)
Domestic 1,313 1,136 117
TOTAL 2,092 2,075 17
Ship Calls
Gross Registered Tonnage
Origin 2010 2009 Variance
Foreign 12,262,577 13,053,002 (790,425)
Domestic 965,806 610,724 346,082
TOTAL 13,228,383 13,663,726 (435,343)
Totalup by0.8%
Totaldown by
3%
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
Seaport Performance (2010 vs. 2009)
Containerized Cargo Volume (TEUs)
Year Import Export Transshipment Empty-In Empty-Out Total
2009 14,809 6,814 283 68 7,278 29,252
2010 17,496 7,772 393 115 8,543 34,318
Upby
17%
Year Bulk / Break Bulk
Heavy Equipment Lift / LO-LO / RO-RO Transshipment Total
2009 1,825,223 385,239 4,203 2,214,666
2010 1,755,397 488,338 1,165 2,244,899
Non-containerized Cargo Volume (MTs)
Upby
1.4%
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
2010 Tourism Performance (2010 vs. 2009)
Arrivals 2010 2009 Variance
Foreign 38,032 46,291 (8,259)
Local 5,435,103 4,054,017 1,381,086
Total 5,473,135 4,100,308 1,372,827
FOREIGN & LOCAL ARRIVALS
Totalupby
33%
F r e e p o r t At a t e o f t h e2 0 1 1 S d d r e s s
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
2010 Tourism Performance (2010 vs. 2009)
NO. OF EVENTS AND EVENT PARTICIPANTS
2010 2009 Variance
Tourism events 389 249 140 56%
Event participants 92,749 174,841 (82,092) (47%)
Hotel Occupancy Rates
Year Average Occupancy Rate
2009 86
2010 88.70
Upby
3%
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
Revenue Generation (2010 vs. 2009)
Combined BIR & BOC Cash Revenue Collections
CollectingAgency 2010 2009 Variance
BIR PhP1,706,288,635.14 PhP 1,313,066,316.05 PhP 393,222,319.09 29.95%
BOC PhP 4,973,793,844.44 PhP 4,288,574,667.95 PhP 685,219,176.49 15.98%
TOTAL PhP6,680,082,479.58 PhP5,601,640,984.00 PhP1,078,441,495.58 19.25%
a t e o f t h e F r e e p o r t A d
METROPOLITAN AUTHORITYSUBIC BAY
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
Other Major Highlights of 2010
ü Dormancy of entire operations of the Freeport ServiceCorporation for lack of sufficient and regular revenuestreams to sustain its operation and provide security oftenure to its employees
ü Dissolution of Task Force Subic in October 2010
ü Collection of PhP30 million in receivables through successfulnegotiated litigation
ü Collection of more than PhP12 million and US$1 million inreceivables through negotiated payment schemes
ü Implementation of new tax collection scheme of 2% of 5%corporate tax paid by SBF locators last August, resulting inrelease of PhP59.9 million to contiguous and affected LGUsas revenue share in February 2011
METROPOLITAN AUTHORITYSUBIC BAY
END OF THESTATE OF THE FREEPORT ADDRESS(PART 1)
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
STATE OF THE FREEPORT(PART 2)Administrator Armand C. Arreza
February 15, 2011
2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s
Daylight
28
The way forward is to move, together, in the broad light of day, where everything we do and how we do it is clear, honest, and transparent.
Daylight.
Infrastructure Philippines 2010: Investing and Financing in Public-Private Projects
Marriot Hotel, Manila, November 18, 2010
METROPOLITAN AUTHORITYSUBIC BAY
The Philippines has failed to sustain growth
29
Nominal Annual GDP Growth, Philippines1960s – 1970s 5-6%1980s >2%1990s 3%2000s 4.4%
GDP and GNP Growth, Philippines 1981-2009
From Arankada 2010METROPOLITAN AUTHORITYSUBIC BAY
Indonesia and Vietnam are set to overtake the Philippines
30
GDP per Capita, PPP, ASEAN-6From Arankada 2010
METROPOLITAN AUTHORITYSUBIC BAY
Even worse, poverty has lingered in the Philippines
31
Poverty Incidence, ASEAN-5
From Arankada 2010METROPOLITAN AUTHORITYSUBIC BAY
Foreign Direct Investment Trends
32
FDI Accumulation, 5-year intervalUS$ Billion
Average Annual FDI, 5-year intervalUS$ Billion
From Arankada 2010METROPOLITAN AUTHORITYSUBIC BAY
Corruption remains the main concern for Investors
33
Areas of dissatisfaction for investors, %age of respondents, Philippines
From Arankada 2010METROPOLITAN AUTHORITYSUBIC BAY
Transparent and Effective Customer Service
34
Promote efficient, effective and transparent business processes
n Complete updated Investors and Residents Guides
n Streamline business registration (CRTE) process
n Complete automation of Admission and Gatepass systems
n Roll-out web-based permitting system and collaborationsystem
n Initiate construction of new Customs Control Area in Tipo
n Enter MOU with DENR for ECC Issuance
METROPOLITAN AUTHORITYSUBIC BAY
Organizational Development
35
RationalizeSBMA
OrganizationalStructure
ReviewBusiness
Processes andSystems
Utilize IT Solutionsto enhance
OrganizationalPerformance
SBMA OrganizationalDevelopment
� Establish the formal organizational design � Develop job qualifications; set and
evaluate job standards and ladders (Position Charters)
• Build a performance management system to cover objective setting, and performance appraisals & improvement
• Plan and implement a compensation system
� Rationalize subsidiaries (FSC, SBDMC, SBITC, STEP) and affiliates
� Map out current business processes and identify key areas of improvement
� Benchmark current systemsSet forth policies and procedures that will guide each of the units in implementing the new systems to be established
� Design a measurement system that will help assess the success rate of this business reengineering.
� Deploy productivity enhancement tools across organization
� Automate key processes
METROPOLITAN AUTHORITYSUBIC BAY
Boost Economic Activity
36
§ Push for issuance of “Open Skies” Executive Order
§ Conclude negotiations with leading budget carrierto hub at SBIA
§ Promote expansion of business aviation throughexpansion of Aviation Concepts and Eurocopter
Revive Commercial Flights to Subic Bay International Airport (SBIA)
METROPOLITAN AUTHORITYSUBIC BAY
Boost Economic Activity
37
§ Complete privatization of New Container Terminal 2 andNaval Supply Depot (Break Bulk and General Cargo)
§ Expansion of oil depots (Coastal Petroleum – 1 millionbarrels, Pure Petroleum – 0.5 million barrels)
§ Expansion of Grain Terminal
§ Develop floating logistics center for iron ore to China
§ Invite Tiger Lines to make regular calls on Subic
§ Push for cap on container cargo in Metro Manila topromote spill over to Subic Bay and Batangas (e.g. 1m TEUcap that Port Authority of Thailand has imposed in Bangkok)
Promote Port of Subic Bay as a Logistics Hub
METROPOLITAN AUTHORITYSUBIC BAY
Key Projects
38
Privatization of NCT2(Q1 2011)
Upgrading and CapacityExpansion of POL Depot(2010-2011)
Privatization of NSD(Q1 2011)
Redevelopment of Boton Wharf (2009 – 2011)
METROPOLITAN AUTHORITYSUBIC BAY
Boost Economic Activity
39
Ensure reliability and competitiveness of Power Supply while harnessing
renewable sources
§ Renegotiate supply agreement for SBFZ– Current supply agreement of US$0.07/kwh only until June 2011
– Demand has grown from 32MW in 2005 to 95MW in 2010
§ Finalize privatization of existing 110MW Bunker Diesel plant– Evaluate need to connect plant to SBMA Grid
§ Complete 300MW clean coal plant in Redondo by late 2013– SBFZ energy self sufficiency
– Eliminate transmission charges
§ Tap and develop renewable sources of power– Generation cost likely to exceed US$0.15/kwh
METROPOLITAN AUTHORITYSUBIC BAY
Power Projects in Subic Bay
40
Bunker Diesel (110MW)Peaking and Back-up
Clean Coal (300MW)Base Load - 2014
Wind (50-100MW)Reserve - 2015
Solar (200MW)Reserve - 2015
METROPOLITAN AUTHORITYSUBIC BAY
Boost Economic Activity
§ Push redevelopment of Central Tourist District
§ Re-zone Subic Bay Gateway Park for commercial and mixed useddevelopment
§ Convert 16ha Marshalling Yard into Gateway Business District
§ Attract anchor educational institution (Paradise lot)
§ Build maritime industrial complex/cluster around HHIC-Philippines
§ Develop integrated resorts in Cawag and Minanga
§ Resolve Subic Bay Golf Course development issues
§ Encourage Zone Expansion
41
Expedite development of priority investment zones
METROPOLITAN AUTHORITYSUBIC BAY
Central Tourist District
42
Harbor Point Mall
Regional Bus Terminal
Subic Bay Yacht Club
Times Square
SRF Yacht Building Cluster
Ampelos Tower
Hotel and Restaurant Row
Historical District
Cruise Ship Terminal
METROPOLITAN AUTHORITYSUBIC BAY
Before Construction (March 2006)
HHIC-Philippines
November 2008
During Construction (January 2007)
Economic Impact
Employment: 18,000+
Capacity (2012): 600,000 DWT
Annual Payroll: Php 3.25 billion
Annual Exports: US$1 billion (2009 est)
Investment (Phase 1): US$1.9 billion
18 ships delivered; 38 ships in pipeline including largest container ships
METROPOLITAN AUTHORITYSUBIC BAY
Delivery Status
2010
2009
2008
2011※ COT : Crude Oil Tanker
10
7
11
1
4,300 TEUContainer
4,300 TEUContainer
4,300/3,600 TEUContainer114K COT
175K Bulker180K Bulker
HHIC-Phil Business PerformanceMETROPOLITAN AUTHORITYSUBIC BAY
HHIC-Phil Business Performance
Container
3,600 TEU 4
3,800 TEU 2
12,800 TEU 8
Bulk Carrier
DWT 175K 7
DWT 180K 18
DWT 205K 11
Tanker
320K VLCC 2
160K COT 4
Order Book
Container 14Bulk Carrier 36
Tanker 6
Total 56
(Value : $ 4.8 Bil)
METROPOLITAN AUTHORITYSUBIC BAY
Minanga Bay Concept
51
Beach Resort5 Star Resort Hotel with Beach Club, M.I.C.E Convention Centre & Water Fun Theme Park forming the tourist core of the area
Golf CommunityGolf Course Real Estate & Holiday Houses complement the whole golf resort development
METROPOLITAN AUTHORITYSUBIC BAY
Pursue Outward Expansion
52
Olo
ngap
oCi
ty •Commercial Development along Magsaysay and Rizal Drive (Ayala Masterplan)
•Housing Development
•Resort Development in Barrio Barreto
Zam
bale
s •Utilities development (Water, Power Generation)
•Shipbuilding expansion in Redondo
•Housing Development
•Resort Development in Cawag (Neocove)
Bata
an • Industrial Estate Development along the Subic-Clark corridor
•Resort Development in Morong (MCastle)
•Reforestation activities
•Preservation of Indigenous Peoples’ Domains
METROPOLITAN AUTHORITYSUBIC BAY