-breaking year - my subic bay official website · -breaking year march 16, 2016 presented by...

-BREAKING YEAR

March 16, 2016

Presented by

ROBERTO V. GARCIAChairman and Administrator, Subic Bay Metropolitan Authority

The Philippine

Economy in 2015

3

THE GOOD NEWS

“The Philippines is one of the fastest-growing economies in

the region — thanks in no small part to the competitiveness

of its exports and its skilled labor force. Good governance,

openness and dynamism have combined to build a strong

economy here in the Philippines.”

Robert Azevedo, Dir. Gen- WTO

May 2015

4S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y

PH GDP Growth

2010 7.7%

2011 3.7%

2012 6.8%

2013 7.2%

2014 6.1%

2015 5.8%

Source: 2015 World Economic Forum

Baa2 (Stable)

BBB- (Positive)

BBB (Stable)

Source: www.gov.ph

Global Competitiveness

Country / Economy2015

(out of 140)2014

(out of 144)

Singapore 2 2

Malaysia 18 20

Thailand 32 31

Indonesia 37 34

PHL 47 52

Vietnam 56 68

Lao PDR 83 93

Cambodia 90 95

Myanmar 131 134

Philippines is the world’s 2nd

fastest growing economy!

Foreign investors show continued confidence


Source:

2015

US$ 5.7 B

2014

US$ 6.2 B

2010

US$ 1.1 B

2011

US$ 2.0 B

2012

US$ 3.2 B

2013

US$ 3.8 B

WHERE ARE WE NOW?

Key Performance Indicators

Revenues - All Strategic Business Units

MARITIME AND LOGISTICS LEAD 2015 GROWTH


FPI 2014 2015 Increase

Maritime &

Logistics

PHP 1,307 M PHP 1,588 M

Industrial &

Commercial

Leases

1,115 M 1,147 M

Tourism 19.6 M 20.0 M

Total Operating

Revenues

2,442 M 2,755 M 13%

21%

2%

3%

Maritime and Logistics Strategic Business Unit

PORT OPERATIONS LEADS 2015 GROWTH


Classification 2014 2015 Increase

Actual Port

RevenuesPHP 884 M PHP 1.08 B

Containerized Cargo

(in TEUs)77,177 123,510

Non-containerized

Cargo (in MTs)6,112,644 7,568,005

No. of Ship Calls 2,591 3,353

Gross Registered

Tonnage40,147,025 54,381,189

22%

60%

24%

29%

13%

One-Stop Shop Center at NCT 1 opens

Inaugurated

on April 24, 2015

by Cabinet Secretary

Jose Rene Almendras


(BOC-SBMA-SBITC)

Maritime and Logistics Strategic Business Unit


Classification 2014 2015 Variance

Airport Revenues PHP 36.2 M PHP 75.9M

Hangar Lease PHP 28 M PHP 70 M

Royalty Income PHP 0.24 M PHP 0.30 M

121%

150%

23%

AIRPORT REVENUES AND LEASES SURGE

Other Airport and Seaport Developments in 2015

Increase in number of shipping lines calling regularly at the Port of Subic

from four (4) in 2014 to seven (7) in 2015

Successful hosting of the Second Maritime Exhibit and Conference

More than 500 shippers and shipping line operators , including shipping and

logistics executives from South Africa, Australia, Singapore, Malaysia, and

Japan

Approval of MOA between DND-AFP and SBMA for the utilization of some

airport and seaport facilities, thus strengthening the Freeport’s role in the

national security strategy

Astro Air’s chartered flights, bringing Taiwanese tourists to Subic


2015 Port Marketing Initiatives

Marketing presentation to the 8th Philippine Ports and Shipping Assembly at the

Intercontinental Hotel of Manila

Participation in the 17th General Assembly of the International Network of

Affiliated Ports (INAP) held at to the New Port of Mokpo, South Korea

Marketing presentation to the Philippine International Seafreight Forwarders

Association, Inc., announcing the one-day accreditation process for freight

forwarders, truckers, brokers, and processors


Industrial and Commercial Leases Strategic Business Unit

APPROVED COMMITTED INVESTMENTS EXPAND

KPI 2014 2015 INCREASE

Total Approved

Committed

Investments

PHP 18.5 B PHP 22.8

Cumulative

Investments

(1992-2015)

US$ 9.1 B US$10 B 10%

23%

S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y 13

Hanjin Performance

Philippines is now the 4th

largest shipbuilder in the world


TOTAL INVESTMENT

US$ 2 Billion

10,000 −

15,000 −

20,000 −

25,000 −

2010 2011 2012 2013 2014

20,005 19,84520,113

18,167

24,652

December

2015

33,863

30,000 −

37% INCREASE IN DIRECT AND INDIRECT EMPLOYMENT IN SUBIC SHIPYARD

EXPORT VALUE

Classification No. Amount

Vessel 91 US$4.84B

Steel Structure 10 US$0.09B

Job Generation Per SBF Industry Sector

4,693 ADDITIONAL JOBS CREATED IN 2015

Sector 2014 2015

Services 45,342 48,396

Shipbuilding &

Marine-related33,109 35,501

Manufacturing 15,076 14,533

Others 3,431 3,221

TOTAL 96,958 101,651


Major Developments in Industrial and Commercial Leases

Start-up of Singapore-based Interflour Group

(Interflour), with a committed investment of US$30

million at Subic Bay Gateway Park Phase II

Takeover and awarding of 85-hectare Subic Bay Golf

Course for re-development and development of

retirement village

Start-up of Jobin Inc.’s 800-hectare 150-MW solar

and wind energy project, the largest in Southeast Asia

Approved New Manufacturing Projects

Tesuphils Inc., a Korean manufacturer of construction

materials with a committed investment of US$6 million

Datian Subic Shoes Inc., a Taiwanese manufacturing

of vulcanized shoes with a committed investment of

US$10 million


Harbor Star Subic Corporation

Marine-related ancillary services

Proposed Investment Commitment: US$4.56 M

Ropali-Teco Corporation

Manufacturing / assembly of electric vehicles


Subic Superfood Inc.

Processing of local pili nuts and Himalayan salt

Proposed Investment Commitment: US$920 K

Nanofixit Ventures Inc.

Rebottling and packaging of liquid screen protector


Datian Subic Shoes Inc.

Manufacturing & export of vulcanized shoes

Proposed Investment Commitment: US$10 M

Resurgence of Manufacturing Industry in SBF


2015 Mabuhay Business Awards

“These locators have breathed life into the local economy. They have transformed vacant

parcels of land into busy commercial establishments and factories – a target range into a

leading shipbuilding facility in the world; and a marsh land into a hi-tech manufacturing facility

producing high value electronic components used by global brands.”


2015 Mabuhay Business Awards

Anglo Asia Commodities Corporation

HHIC-Phil, Inc.

Honeywell Ceasa (Subic Bay) Company, Inc.

Moon Kkang Talk, Inc.

Petron Freeport Corporation

PLDT Subic Telecom, Inc.

Philippine Coastal Storage and Pipeline Corporation

Royal Duty Free Shops, Inc.

Sanyo Denki

S-Corp Philippines, Inc.

Subic Bay Freeport Grain Terminal Services, Inc.

Subic Bay International Terminal Corporation

Subic Bay Town Center, Inc.

Tong Lung Phils. Metal Industry Co., Inc.


LIST OF AWARDEES(In alphabetical order)

Overseas Investment Promotion Initiatives

PARTICIPATION IN VARIOUS INVESTMENT PROMOTION ACTIVITIES

12th China ASEAN Expo

Outbound Mission to Taiwan, resulting in the immediate visits to Subic of a

delegation from Taichung and executives from steel company Yieh Phui

Enterprise Co., Ltd.

Philippines Investment Promotion Plan (PIPP) Outbound Mission to Tokyo,

Japan

Philippines-Taiwan Joint Economic Conference for possible MOU between

MECO and TECO

APEC Senior Officials Meeting

Outbound Mission to Seoul, Korea, spearheaded by the Department of Foreign

Affairs, resulting in planned visit of RESOM executives to the Freeport in June

2016


Tourism Strategic Business Unit


YEAR VISITOR

ARRIVALS

2014 6,398,376

2015 7,729,484

INCREASE 14%

Tourism Traffic


YEAR TOURIST ARRIVALS HOTEL OCCUPANCY

RATE

2014 1,177,073 64%

2015 1,429,040 70%

INCREASE21% 9%

MICE Events and Participant Count


MICE EVENTS NO. OF PARTICIPANTS

CLASSIFICATION 2014 2015 VARIANCE 2014 2015 VARIANCE

INTERNATIONAL 10 15 50% 26,050 18,320 -30%

LOCAL 268 275 3% 219,795 231,297 5%

TOTAL 278 290 245,845 249,6172%4%

Sports Events and Participant Count


SPORTS EVENTS NO. OF PARTICIPANTS


INTERNATIONAL 17 28 65% 21,870 23,705 8%

LOCAL 59 54 -8% 21,830 37,765 73%

TOTAL 76 82 43,700 61,470 41%8%

Total Events and Participant Count


TOTAL EVENTS NO. OF PARTICIPANTS


INTERNATIONAL 27 43 59% 47,920 42,025 -12%

LOCAL 327 329 1% 241,625 269,062 11%

TOTAL 354 372 289,545 311,0875% 7%

2015 Major Events


Other Tourism Promotion Initiatives

PhP2.13 billion additional committed investment, or 119% higher than

2014

1,167 projected additional jobs, or 148% higher than 2014

PHP21-million renovation of Subic Bay Exhibition and Convention

Center

Production of 2016 Tourism calendars, promoting the Freeport as the

MICE Capital of Central Luzon, and as Theme Park, Triathlon, Sailing,

and Sports Capital of the Philippines

Stronger tourism promotion thru existing official social media accounts

such as Facebook, Twitter, YouTube, and news blog (E.g. Total of 3,474

likes vs Clark’s 560 likes in FB, as of December 31, 2015)


Other Tourism Promotion Initiatives

22,500-

TOTAL

FOOT

TRAFFIC

86,588-

TOTAL

FOOT

TRAFFIC

27,000-

TOTAL

FOOT

TRAFFIC

57,725-

TOTAL

FOOT

TRAFFIC


Hotel and Resort Accommodations

HOTEL OCCUPANCY RATE IMPROVES

TOTAL NO. OF OPERATIONAL HOTELS / RESORTS

CY 2014 40

CY 2015 44

GROWTH RATE 10%

TOTAL ROOM ACCOMMODATIONS

CY 2014 2,964

CY 2015 3,219

GROWTH RATE 9%

HOTEL OCCUPANCY

CY 2014 64%

CY 2015 70%

2015 ANNUAL RATE 9%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2014 2015

HOTEL OCCUPANCY

9%


SBMA contribution to the National Economy

CONTINUOUS GROWTH IN SBMA CONTRIBUTION


KPI 2014 2015 Variance

BOC PHP15.3B PHP16.4B

BIR PHP1.79B PHP1.73B

Locator’s Income Tax

NG share (3%)PHP308M PHP373M

Locator’s Income Tax

LGU share (2%)PHP206M PHP248M

Dividends PHP243M PHP527M

TOTAL PHP17.8B PHP19.3B

21%

21%

117%

7%

3%

8%

BIGGER REMITTANCES FROM SBMA

National Government and LGU Shares


Allocation

from 5%

Corp. Tax

2011 2012 2013 2014 2015

2015

vs

2014

(in Million Pesos)

National

(3%)

PHP222 PHP205 PHP235 PHP308 PHP373

LGUs

(2%)

147 137 157 206 248

TOTAL PHP369 PHP342 PHP391 PHP515 PHP621

21%

21%

21%

GOOD GOVERNANCE

Jobs and Exports

STEADY GROWTH IN EMPLOYMENT AND EXPORTS


KPI 2014 2015 Variance

Employment 96,958 101,651

Export

(FOB-US$)

US$ 2.3 B US$ 2.5 B 8.7%

4.8%

Good Governance Initiative

2007 - 2015 Comparative Crime Volume


DECREASING CRIME INCIDENTS

295

195

116

128

106

4738

29

20

0

50

100

150

200

250

300

350

2007 2008 2009 2010 2011 2012 2013 2014 2015

Good Governance Initiatives


10% salary increase retroactive two years / Increase in employee benefits / Upgrading of

141 COS to plantilla positions / Promotion of 225 employees / Pending SSL increase

Signing of Integrity Pledge by the SBMA Board of Directors and employees

Institutionalization of Integrity Pledge by requiring locators to sign it as pre-condition to

CRTE renewal

Resolution of CUSA cases at the Regional Trial Court, Court of Appeals, and Supreme

Court in favor of SBMA

Where are we going? SUBIC 2020

2016 Strategic Directions

Major focus on retirement/BPO/Maritime/new locators

Creation of new industrial parks for foreign investors

SSL approval and inclusion under new SSL program

Sister Port MOUs with Taiwan, Virginia Beach, and San Francisco

Increased CAPEX, especially for transport equipment, roads, airport, etc.

Continued work on new SBMA Corporate Center

Institutionalization of good governance reforms

Feasibility studies for expansion plans i.e. Tipo widening, new connector road to

SCTEX, and Container Terminal 3 and 4.

Improved CUSA and ETAF collections

Further reduction of red tape and improvement of customer service


Environmental Protection

Symposium on Climate Change Adaptation, SBMA Environmental Permitting &

Monitoring System, and conduct of 3 other environmental forums for Pollution

Control Officers of different SBF companies

Establishment of mangrove nursery in Malawaan area and conduct of Assisted

Natural Regeneration activities in the Binictican mangrove

Establishment of 4 satellite nurseries at the SBMA Reforestation Site

Institutionalization of Subic Bay Arbor Day as an annual celebration which was

attended by almost 1,000 participants who planted 7,000 trees that day

Drafting and signing of temporary agreements with Mabiga farmers to ensure the

smooth implementation of the Wind and Solar Energy Project

Conduct of Public Hearing for the Water Classification of Subic Bay’s marine

waters for classification of our water body so we can better manage and protect

it from degradation and pollution as required by law.

Participation in World Coastal Clean Up Day


Financial Performance

2015: ANOTHER CHART-BUSTER

YEAR

13%↑

SBMA Gross Revenues


200

800

1,310

1,540 1,5001,570

1,400

1,630

2,020

2,442

2,755

0

500

1,000

1,500

2,000

2,500

3,000

1993 1996 1999 2002 2005 2008 2011 2012 2013 2014 2015

2015 IS HIGHEST EVER

2011-2015 SBMA GROSS REVENUES


1,338.16 1,443.35 1,475.06 1,594.941,813.34

60.61

184.02

544.9

846.67

941.66

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

2011 2012 2013 2014 2015

Existing Revenues New Revenues / CostRecovery Initiatives

SBMA Operating Income (EBITDA)


EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization

7%↑

39

361

550

779

435359 329

627

920

1,391

1,484

0

200

400

600

800

1,000

1,200

1,400

1,600

1993 1996 1999 2002 2005 2008 2011 2012 2013 2014 2015

2015 IS HIGHEST EVER

SBMA Net Income


-185-82 -106

135

-102

-2540

-1119

800

1110

1556

797

-3000

-2500

-2000

-1500

-1000

-500

0

500

1000

1500

2000

1993 1996 1999 2002 2005 2008 2011 2012 2013 2014 2015

NET INCOME WITH GAIN (LOSS)

ON FOREX REVALUATION

805

1,016

0

200

400

600

800

1,000

1,200

2014 2015

NET INCOME WITHOUT UNREALIZED

GAIN (LOSS) ON FOREIGN EXCHANGE

26%↑

BENCHMARKING

Comparative Figures among Luzon Free Ports

WE ARE THE LARGEST AND MOST PROGRESSIVE FREE PORT


Particulars SBMA CDC CEZA AFAB PPMC

TOTAL ASSETS 28,089,039,000 5,722,137,240 5,475,883,000 1,502,943,911 97,193,218

REVENUES 2,754,650,000 1,303,999,000 492,963,000 823,966,671 66,259,000

TOTAL EQUITY 16,974,890,000 3,493,929,538 5,188,225,000 978,774,109 60,771,144

NET INCOME

(LOSS)1,110,450,000 331,736,917 200,338,000 7,530,133 (4,278,035)

Source: COMMISSION ON AUDIT

REGIONAL DISTRIBUTION OF TRAVELERS

Region III Central Luzon

Source: Department Of Tourism

Guest Arrival Market Share

CLASSIFICATION CLARK

SUBIC BAY

FREEPORT

ZONE

All Other

Region III

Provinces

Combined

Grand Total Guest Arrivals 1,001,980 1,463,480 1,130,637

Total Philippine Residents 512,659 1,395,300 874,612

Total Non-Philippine Residents 489,321 37,153 256,025

Total Overseas Filipinos - 31,027 -


Still the top tourist destination in Central Luzon


TOP CENTRAL LUZON DESTINATION

FOR TWO (2) CONSECUTIVE YEARS

NO. 7 FRIENDLY DESTINATION

IN THE PHILIPPINES

Highest number of regional travelers - both local and foreign - based on reports submitted by

accommodation establishments in all the seven (7) provinces and two (2) special economic

zones in Central Luzon

SOURCE: www.visitmyphilippines.com – The Ultimate Travel Guide for Tourists, August 12, 2015

Increased interest in Subic Bay Freeport as a destination

SUBIC

AMONG GOOGLE PH’S

2015 MOST SEARCHED

DESTINATIONS


Subic Bay Freeport: The Best in Asia and the Philippines

SBMA’S FIRST INTERNATIONAL

RECOGNITION AND GLOBAL

AWARDS


fDi Magazine is a publication of Financial Times of London

2016 and Beyond

What We Face in 2016

THREATS

Heightened political activities due to 2016 National and Local Elections

ISIS threat in Southeast Asia, including Philippines

This year’s El Niño, which is expected to bring devastating weather

disturbances similar to those in 1997, when PH suffered from 11 super

typhoons and several storms that caused almost US$5 billion worth of

damages

Political instability, affecting FDI climate



OPPORTUNITIES

PH among the top three countries in business optimism in 2016, as

showed in global survey by Grant Thornton’s International Business

Report

Continued exit of investors from China paving the way for the

emergence of Philippines as the next big investment hub in Asia

Continued interest of PH in joining the Trans-Pacific Partnership (TPP)

to lower or eliminate trade restriction



OPPORTUNITIES

Strong prospect of ASEAN countries to attract higher levels of FDI flows

given the strong economic fundamentals, resilient economies, and

growing affluence of consumers in the region

Growing labor force with median age of 23 will result in demographic

dividend creating a huge talented labor pool for jobs and a huge

consumer market

Big election spending, resulting in uptick in GDP growth

Continued port congestion


SBMA 5-YEAR STRATEGIC PLAN

Where are we going? SUBIC 2020

2016 Strategic Directions

Major focus on retirement/BPO/Maritime/new locators

Creation of new industrial parks for foreign investors

Sister Port MOUs with Taiwan, Virginia Beach and San Francisco

Increased CAPEX, especially for transport equipment, roads, airport, etc.

Continued work on new SBMA Corporate Center

Institutionalization of good governance reforms

Feasibility studies for expansion plans i.e. Tipo widening, new connector road to

SCTEX, and Container Terminal 3 and 4.

Improved CUSA and ETAF collections

SSL approval and inclusion under new SSL program

Further reduction of red tape and improvement of customer service



2016 TARGETS

1. Implementation of the Golf Course LDA

Minimum Committed Investment: US$30 million

Projected revenues: US$375,000 per annum plus 5% SBMA gross revenue share

Approximately 2,000 additional foreign retiree residents

2. Approval and award of the former Legenda Hotel facility compound to

a BPO Gaming developer

Minimum Committed Investment: PHP 300 million

Projected lease rental revenues: PHP43.2 million per annum

Approximately 2,000 foreign BPO agents to reside in Freeport area

3. Approval and award of Bldg. 8120 compound to a new lessee

Projected lease rental revenues: PHP30 million per annum

4. Approval and award of the AIS school compound to a new lessee

Estimated committed investment: PHP100 million

Projected lease rental revenues: PHP30 million per annum in addition to a one-time

payment to SBMA of Php15 million



2016 TARGETS

5. Approval and award of Bay 1, Bldg. 1026 to a new lessee


6. Approval and award of Blue Skeleton to a new lessee and hotel /

resort developer

Estimated committed investment: US$50 million


7. Approval and award of 2.4 hectare-lot at the back of SBDMC to a new

lessee

Estimated committed investment: PHP25 million

Projected lease rental revenues: PHP15 million per annum

8. Approval of floating depot / drydock projects

Estimated committed investment: US$15 million


Tourism Strategic Business Unit

Some 2016 Big Events

● Pilipinas Ad Summit 2016 ● Bike King Cycling Event

● 2016 Holy Week Activities ● Subic International Marathon

● Century Tuna Iron Man ● Vios Cup 2016

● Regent 5150 Triathlon ● 2016 National Tourism Week

● Triathlon Association of the Phils. ● 2016 Christmas Celebration

ASTC Subic Asia Cup and New Year’s Eve Countdown

Production of new tourism promo and marketing materials, including TV

commercial, AVP, Lupang Hinirang, and official jingle

PLDT-SubicTel LED (light-emitting diodes) display boards along Freeport

major thoroughfares


Redevelopment of Triboa Bay

A project of the MSK Group,

through its affiliate

companies Xantheng (Subic)

International Corp., Weihsin

Subic Bay Corp., and

Zangyueh Development

Corp.

Projected total investment:

US$15 M for the

redevelopment of Triboa Bay

Clubhouse and Triboa tennis

and badminton courts

through construction of three

(3) new building facilities

Total of 116 hotel rooms and

180 condo units

Leisure Projects in the Pipeline


Leisure Projects in the Pipeline

Subic Smart Hospitality Corp. (Japan)

US$30 M minimum investment

Redevelopment of Subic Bay Golf

Course into a world-class, all-weather

facility

Development of a retirement community

for Japanese retirees (Minimum of

2,000)

Benefic Corp. (Japan)

PHP150 M committed investment

Three (3)-storey dormitory / hostel

building facility


Good Governance Strategic Initiatives for 2016

Augmented 2015 budgeted totaling PHP400 million for salary increase under the

Standard Salary Law retroactive to 2012

Institutionalization of Integrity Program in SBMA and signing of Integrity Pledge by

Freeport locators as a shared commitment to adhere to ethical business practices

Celebration of Women’s Month in SBFZ to promote the welfare and development of

womenfolk under a progressive GAD program.


INDUSTRY SECTOR SOURCE NO. OF JOBS NATURE OF JOBS

TOURISM & SERVICES 10,000HRM, Hotel Staff, Chefs,

Nutritionists, Back Office

SHIPBUILDING 10,000

Welders, Painters, Design

Engineers, Naval Architects,

Scaffolders

BPO 20,000

Call Center Agents, IT Technicians,

Design Engineers, Web Design

Specialists, Medical Transcribers

MANUFACTURING 5,000Factory Workers, Technicians,

Production and Quality Supervisors

MARITIME & LOGISTICS 5,000Warehousemen, Shipping

Specialists, and Customs Brokers

Target: Additional 50,000 Job Prospects


INCLUSIVE GROWTH

61

THE GOOD NEWS

“The Philippines is projected to become one of the world’s 16

largest economies in the next 35 years, joining a list of newly

emerging and established emerging economies that are

helping to push the shift of economic power from advanced

economies to emerging markets,”

PricewaterhouseCoopers, A global consulting company

February 2015

MEDIA ADVISORY

TO SECURE A SOFT COPY OF SBMA CHAIRMAN

ROBERTO V. GARCIA'S 2015 STATE OF THE

FREEPORT ADDRESS, PLEASE BRING YOUR FLASH

DRIVE TO THE PUBLIC RELATIONS OFFICE, BLDG.

255, BARRYMAN ROAD OR CALL (047) 252.4368 /

252.4338.

YOU MAY ALSO DOWNLOAD IT FROM

www.mysubicbay.com.ph/about-us/performance-state-

of-the-freeport-address

THANK YOU.

-breaking year - my subic bay official website · -breaking year march 16, 2016 presented by...

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