2 | february 2011

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The Business Paper of the New Economic CorridorSubicCentral

The total number of Subic Freeport workforce now stands at 88,450 and still growing. Aside from investments, an-

other key indicator of the growth and perfor-mance of the Freeport is employment. “This is not only part of our mandate but also our way of contributing to the uplift of our neighboring communities,” Subic Bay Metro-politan Authority (SBMA) Administrator Ar-mand Arreza said. Projected employment from approved for-eign and local investment projects in 2010 ex-panded by more than 11 percent. Arreza said that additional 1,000 or so work-ers also joined Subic workforce last year, slight-ly increasing its total active labor force from 2009 headcount of 87,226 to 88,450 last year. Of our total active workforce, 40 percent were employed in the services sector, 29 per-cent in shipbuilding and marine-related com-panies, and 17 percent in manufacturing. These figures show a growing trend away from manufacturing and towards services and shipbuilding. “Speaking of shipbuilding, hanjin shipbuild-ing’s manpower complement is, I think, worth mentioning,” Arreza said as he delivered the Subic Freeport performance update during the State of the Freeport Address. “Four years ago there was not much going on at all at Redondo, we now have over there not only the world’s fourth largest shipyard but also some 20,000 workers,” he added.

Top 10 Employers ARRezA acknowledged the top ten employers for 2010 that include Greenbeach Powertec, Ni-dec, Sanyo Denki, Metrobay, Freeport i-Tech, Binictican i-Tech, Subic Shipbuilder, Redondo i-Tech, Kalayaan i-Tech, and Redondo Baytech. The top ten employers have a total of 20.24 percent share of the total Freeport workforce or about 17,900 highly-skilled workers com-posed mostly of shipbuilders and electronic manufacturing technicians.

Outstanding Freeport Workers LIKewISe, Arreza recognized the ten out-standing Freeport workers who were selected through a rigid screening process that empha-sized efficiency, positive work attitude, leader-ship capabilities and interpersonal maturity.

“These workers do not only represent the best in the more than 1,350 companies locat-ed in Subic Freeport, but the best of the Filipi-nos as well, Arreza said. “And they prove that Subic is the home of world-class workers.” The Subic Bay Marine exploratorium has two of the ten outstanding workers – Benamor Labadan and Francisco Roberto as well as the Philippine Coastal Storage and Pipeline Cor-poration with also two outstanding workers - Jesus Vener Mallen and Alfredo Sadora. Another two come from SBMA’s human Resource and Management Depratment – Mr. Larry Aquino and Ms. Nedelyn Catiis. And the rest are Jean Castro of Nicera Philippines, el-vira Mullis of Subic Bay Gateway Park BDMC, Mark San Gabriel of Subic water, and Marisa Tamayo of Nidec Philippines.

HR DevelopmentA motivational speaker once said and Arre-za quoted in this speech— “The only thing worse than training your employees and los-ing them is not training your employees and keeping them.” “As far as training our workforce, however, is concerned, I think we have also made the grade. As a matter of fact, we take pride in having as one of our assets a readily available pool of skilled and highly trainable manpow-er,” Arreza said. South Korean shipbuilder hanjin heavy In-dustries Corp. Philippines for one, has its own Skills Development Center where more than 22,000 workers have been trained since 2007 in the different aspects of shipbuilding – from welding to machining.

The SBMA, too, through its Labor Depart-ment, continues to advocate needed adjust-ments in school curricula to produce graduates with skill sets that match the current demand of employers and investors here. Last year, the SBMA Labor Department like-wise issued a training calendar to inform loca-tors about various training programs that were extended by Non Government Organizations as well as Government Organizations. Also included in this calendar were specif-ic training programs that were requested and proposed by proponents or by locator-compa-nies. Last year’s training programs ranged from stress management and employee coaching for excellence to basic computer training, project cycle management and a lot more.

The total export value in Subic Freeport hit an all-time high record with freight-on-board

(FOB) value of $1.34 billion in 2010.Subic Bay Metropolitan Authority (SBMA) administrator and CeO Ar-mand Arreza, who recently present-ed the state of the free port to Subic investors, said that Subic’s total ex-ports surpassed the 2009 export val-ue of $1.08 billion by 24.6 percent or $265.6 million year-on year. According to SBMA records, the top 10 exporters last year contributed the bulk of export production – turning out an aggregate of $1.16 billion out of the total value of $1.34 billion. The biggest exporters were led by Korean shipbuilder hanjin heavy Industries Corp.-Philippines (hhIC-Phil), which exported a total of $725.8 million in FOB value. hanjin’s exports in 2010 included two oil tankers – the M/T Leyla K and its twin M/T eser K, that were deliv-ered in January and March, respec-tively, to the Turkish-owned Kapt-anoglu Shipping Line. hanjin officials said the two were the first and biggest crude oil tankers ever built in the Philippines, tipping the scales at 114,000 deadweight tons and measuring 241.27 meters long, 44 meters wide, and 21.35 meters deep. each was worth $68 million. In February last year, hanjin also completed the APL Bahrain, 259.8 meter-long container ship which has a capacity of 4,330 twenty-foot equiv-alent units (TeUs). This was built for the Singapore-based American Presi-dent Lines (APL). Following hanjin among the top exporters were Japanese electron-ics producer Sanyo Denki Phils., Inc., which produced $103.2 million in ex-ports; Taiwanese computer-maker wistron Infocomm Phils., with $75.3

million; Japanese ATM-machine man-ufacturer hitachi Terminals Mecha-tronics Phils. Corp., with $57.7 million; and Taiwanese metal manufacturer Tong Lung (Phils.) Metal Industry, with $53.1 million. Completing the list of top 10 ex-porters are: Juken Sangyo (Phils.) Corp., with exports of $53 million; Tapu Corp., with $27.7 million; Nicera Philippines, Inc., with $22.2 million; Cano Subic Corp., with $20.8 million; and Nidec Subic Philippines Corp., with $18 million. At least four of the top 10 export-ers were also in the list of the Bureau of Internal Revenue’s list of top tax-payers in Subic. Meanwhile, imports by Subic-reg-istered firms also showed a strong per-formance, jumping by 55.28 percent to $3.48 billion in 2010 from a mere $2.24 billion in 2009. According to records from the SBMA Trade Facilitation and Com-pliance Office, the total FOB value of the top 10 importers here last year amounted to $2.79 billion, or more than 80 percent of the yearend total.

Topping the list of Subic’s top 10 im-porters was Sanyo Denki Philippines, Inc., with total imports of $606.48 million. Sanyo Denki has been con-sistently in the top 10 importers list for the last five years. Following Sanyo Denki were: PTT Philippines Trading Corporation with $424.6 million in imports; hhIC-Phil with $381.38 million; Koryo Subic, Inc., $368.84 million; Nicera Phils., $240.85 million; Nidec Subic Phils. Corp., $224.25 million; Koushin Mfg. Phils., Inc., $183.33 million; wistron Infocomm (Phils.) Corp., $156.96 mil-lion; Micro Dragon Petroleum, Inc., $138.23 million; and Challenger Aero Air Corporation, $67.62 million. Arreza pointed out that aside from posting the new export record, Subic Freeport also turned out the biggest amount of duties and taxes in a single year – a total of P6.68 billion on 2010, as well as one of the highest import values so far – a total of $3.48 billion. Arreza said that these indicate a stronger Subic economy and the grow-ing competitiveness of the free port as a manufacturing and trading center.

ANOTheR significant measure of the state of the Freeport is the amount of revenues it gen-erates for the national coffers.

Last year saw a substantial increase of 19 percent in cash collections here by the BIR and Customs – with the BIR enjoying an improvement of almost 30 percent in its collection in 2010, com-pared to what it collected in 2009. Also an interesting fact is the Bureau of Customs’ performance here, especial-ly in November 2010, when despite the declining trend in Customs collections all over the country, the Port of Subic managed to collect 501 million pesos, or a 59-million-peso excess over the BOC’s target of P442 million. This outstanding collection perfor-mance of the BOC in Subic appeared to defy what Customs officials then de-scribed as a countrywide revenue short-fall for the second half of 2010. According to BOC officials, too, Subic, along with Clark and Tacloban, regis-tered the only positive record among the 17 ports in the country, with Subic as the best performer that month. Combined cash collections by the Bu-reau of Internal Revenue (BIR) and the Bureau of Customs (BOC) allowed the Subic Bay Freeport zone to remit P6.68 billion to the national treasury last year. Subic Bay Metropolitan Authority (SBMA) administrator and CeO Armand Arreza said that revenue collection in 2010 topped the 2009 record by 19.25 percent, or a surplus of P1.08 billion. The collections last year also topped Subic’s 16-year revenue collection record as well. “For the year 2010, both collection agencies pegged their goal at a total of P6.14 billion, and performance-wise they surpassed it by 8.72 percent, or a total of P535.5 million,” Arreza said. Arreza added that from January to December 2010, the BOC posted cash collections worth P4.97 billion, thus ex-ceeding the 2009 record of P4.67 billion by 6.5 percent. In November last year, the BOC also posted the highest monthly collection it ever made in this free port: a total of P501.6 million. This was 52.7 percent more than the P328 million posted in the previous year.

On the other hand, the Subic revenue district posted collections worth P1.71 billion last year, a performance that also made it the district’s all-time high, as it recorded a 15.73 percent surplus over its goal of P1.47 billion. According to SBMA records, BOC cash collections were derived from duties and taxes paid for ship calls, transshipment operations, and the importation of vari-ous inputs, including oil, motor vehicles, and other general merchandise. These are separate from non-cash collection derived from government-to-government transactions, which amounted to P3.42 billion — a figure 16 percent higher than the 2009 figure of P2.88 billion. Subic District Collector Talek Pab-lo, meanwhile, attributed the increase in Subic revenue collections to the en-hanced Automated Cargo Transfer Sys-tem (e-ACTS), which ensures fast, safe, synchronized and secure cargo transit between Subic and the Ninoy Aquino International Airport (NAIA), as well as the Port of Manila and the International Container Port Terminal. Introduced in mid-September 2010 as an electronic protocol in lieu of face-to-face transactions, the e-ACTS not only boosted Subic’s campaign against smuggling and diversion of cargo, but also enhanced the collection of proper Customs duties and other revenues. Arreza also noted that even as a new tax collection scheme implemented last year allowed the SBMA to collect part of the 5 percent corporate tax paid by Subic-registered investors, “the BIR still managed to increase its collection per-formance in Subic.” “This only means that we are success-ful in widening our tax base in Subic, as we take in more investments and create more jobs,” Arreza added. The new scheme facilitated the direct release by the SBMA of revenue shares to local government units that are classi-fied as either “contiguous” or “affected” under Republic Act No. 7227, which cre-ated the SBFSez. Arreza said about half a million residents of the eight beneficia-ry LGUs adjacent to the free port would benefit from the revenue share.

Subic Freeport, home of world-class workers

Subic Freeport turns in P6.68-B income in 2010Exports hit all-time

high at $1.34 billion