SBMA year-end report: Exceeds Expectation in 2009, Brighter Prospects in 2010

Subic Bay Freeport closes 2009 with renewed confidence that the effects of the global economic crisis to local economy would soon be over, expressing much optimism and brighter prospects into 2010.
Economic indicators such as employment generation, import and export earnings, and seaport revenues posted positive growth while investment commitments put up by Filipino-owned companies, for the first time in recent years, surpassed foreign direct investments.

Employment
Companies engaged in shipbuilding and maritime-related services notched gains as they are now considered as the biggest Freeport employers surpassing the electronic manufacturing sector which was badly affected by the global economic crunch.
The Subic Bay Metropolitan Authority (SBMA) reported growth in shipping industry as it was buoyed by impressive statistics indicating strong performance in job generation that offered hopes for unrelenting recovery from global economic downturn.
The SBMA noted that the service-oriented companies still employ the bulk of close to 87,000 workers hired by various business locators here.
SBMA Administrator Armand Arreza said that seven of Subic’s top 10 biggest employers are in the maritime business, while the three others that complete the list are from the electronics manufacturing business.
“This has been the case since Korean shipbuilder Hanjin Heavy Industries & Construction Corp. located in Subic in 2006,” Arreza noted. “While the services sector still hired most of Subic’s workers, those in the shipbuilding and manufacturing industries usually landed in the top 10 biggest individual employers.”
“These two industries are really catching up fast in terms of hiring, but the bulk of Subic’s workforce still depended on companies that provide services,” Arreza added.
According to SBMA data, the biggest employer in Subic as of October 2009 is Hanjin Heavy Industries & Construction Corp., which has a total of 3,118 employees. Hanjin operates a $1.7-billion shipyard at Subic’s Redondo Peninsula and builds some of the biggest vessels in the world today.
Following Hanjin in the second and third slots are two Japanese manufacturers—computer parts-maker Nidec Subic Phils. Corp., which employs 2,361 workers; and electronics motor-producer Sanyo Denki, which has hired a total of 2,218.
The fourth and fifth biggest employers are Korean companies that provide support services to Hanjin. These are Subic Shipbuilder Corp., with a total of 1,862 employees; and Greenbeach Powertech Inc., with a total of 1,693 workers.
In sixth place is Taiwanese computer-maker Wistron Infocomm Phils., which has a total of 1,699 employees. Wistron used to be Subic’s biggest employer prior to the establishment here of Hanjin in 2006.
The rest of the companies on the top 10 employers list are all Hanjin subcontractors: Subickor Corp., which has a total of 1,662 workers; Metrobay Corporation, with 1,514; Redondo Baytech Corp., with 1,426; and Kalayaan I-Tech Corp., which has a total of 1,361 employees.
With a total manpower complement of 15,796, the top 10 employers, however, delivered only 18.51 percent of Subic’s current employment record of 86,631.
SBMA data as of October 2009 also indicated that the number of workers in the services sector stood at 38,676, or 44.64 percent of the total workforce in the free port, while those in the shipbuilding and maritime sector totaled 25,301, or 29.21 percent.
The rest come from the manufacturing sector, which had 15,614 workers, or 18.02 percent; construction sector, with 6,494 or 7.5 percent; and the domestic sector which employed a total of 546 helpers and caretakers, or 1 percent.

Exports
The SBMA also said that exports in the Subic Bay Free Port in 2009 have so far grown to $800.98 million as of September. This represented a slight increase over the $755-million export production in the same period in 2008.
According to the SBMA, Korean shipbuilder Hanjin Heavy Industries & Construction Corp. is the biggest exporter in 2009, with $355.56 million in freight-on-board (FOB) deliveries as of November.
Hanjin is followed by Taiwanese computer maker Wistron Infocomm (Philippines) Corp., with $111.4 million; Hong Kong-based Lets Do Mobile Philippines, with $63.52 million; and Japanese electronic motor-maker Sanyo Denki Philippines, with exports of $50.91 million.
Rounding out the top 10 exporters are Japanese ATM maker Hitachi Terminals Mechatronics Philippines Corp., with $43.08 million; Japanese wood-products producer Juken Sangyo Philippines, $26.03 million; Taiwanese lock maker Tong Lung (Philippines) Metal Industry, $17.71 million; Danish eyeglasses manufacturer Lindberg Subic Inc., $14.88 million; Japanese sensor-maker Nicera Philippines Inc., $12.13 million; and Japanese computer parts-maker Nidec Subic Philippines Corp., with $9.8 million.
The SBMA said that import transactions made in Subic from January to November 2009 reached a total of $2.01 billion, or a 6.14-percent decrease from the $2.14 billion record set in the same period in 2008.
Subic’s top importers for this year are Hanjin Heavy Industries & Construction Corp., with an FOB total of $378.46 million; Sanyo Denki, with $335.17 million; PTT Philippines Trading Corp., $289.94 million; Wistron Infocomm, $182.56 million; Nidec Subic, $135.45 million; Nicera Philippines, $86.79 million; Micro Dragon Petroleum Inc., $72.65 million; Koryo Subic, Inc., $54.3 million; Lets Do Mobile Philippines, $48.54 million; and Ixion Corp., with imports totaling $45.4 million.

Revenues
The SBMA reported that it expects to surpass the revenue-generation record of P5.27 billion in 2008.
This, as cash earnings by both the Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR) began showing minimal growth in the last quarter, Arreza said.
Arreza said the combined BOC and BIR collections will “pull Subic through to a positive performance despite a shortfall in foreign direct investment [FDI].”
“As of now, we only need about P394.6 million more to reach the 2008 revenue level. That’s about a month’s worth of collections to make,” Arreza said.
With BIR figures for October and November yet to come in, while total collections averaged P443.7 million a month in the last 11 months, “the December earnings alone should bring total earnings over and above the 2008 record,” Arreza said.
Reports by the BOC and the BIR to the SBMA indicated that the cash collections of the two agencies from January to November 2009 have already reached P4.88 billion, with the BOC delivering P3.85 billion and the BIR P1.03 billion.
But aside from cash collections, Subic Customs Collector Marietta Zamoranos also reported about P2.78 billion in noncash earnings, which are mostly composed of government-to-government transactions.
Despite this strong collection, the BOC here said its collection in 2009 is still short by about P71.36 million compared with its 2009 target. The Customs office here has set a P3.92-billion goal for the January-November period, but has thus far collected only P3.85 billion.

Investments
Filipino firms made it to the top of the chart by drowning out the competition with sheer numbers: a total of 139 investment projects that, taken all together, were worth about $96.22 million.
This translates to 57.74 percent of the $166.64 million total for investment projects approved by the SBMA board from January to November 2009.
Korean firms, which held sway here since 2006 when shipbuilder Hanjin Heavy Industries Corp. plunked its initial $1-billion investment, slipped to the No. 2 position with only 26 investment projects worth a total of $55.86 million, or 33.52 percent.
This was less than a third of the $198.84 million (85.48 percent) committed by 46 Korean companies in 2008, the same year that 67 Filipino firms invested $10.09 million (4.33 percent).
The third slot among the biggest investors this year went to a Swiss-owned company, which put up a project worth $7 million or 4.2 percent; followed by six Taiwanese projects with a total worth of $2.86 million; and four Japanese projects with a total of $1.27 million.
Arreza said that FDI in the January-November 2008 period totaled $224.82 million. For the same period in 2009, it was only $73.82 million.
However, even as foreign investment dropped in 2009, Arreza noted that Filipino companies “more than made up for the slump” and carried the day for Subic’s investment performance.
“This is an encouraging sign,” Arreza said. “As far as we can tell, Subic is fast regaining its footing in terms of investment generation.”
For the last two months alone, investment pledges in Subic reached a total of $44.42 million, with a total of $23.1 million committed by 12 investor-companies in October, and a total of $21.32 million pledged by 22 other firms in November.
Arezza said that among the biggest investors in the two-month period is Filipino real-estate giant Ayala Land Inc., which pledged $21.4 million for the construction, development and operation of a retail and commercial center.
Seven other Filipino companies made it to the list of top 10 biggest investors this year. These are Tountzis Shipping Inc. with $20.23 million; Jadelink Subic Inc., $16.85 million; Pure Petroleum Corp., $6.22 million; Subic Business and Technology College, $4.29 million; Bonsure Evergreen International Corp., $2.21 million; Chifil International Import-Export Manufacturing Co. Inc., $1.41 million; and Eastern Subic Fuel Depot Corp., with $1.05 million.
The only foreign companies on the same list are Korean casino-resort developer Ocean Nine Philkor Inc., which pledged $52.38 million; and Swiss-owned Philip Morris Philippines Manufacturing Inc., with $7 million for its warehousing operation here.
The SBMA also said that the 163 projects it has approved in 2009 are expected to create a total of 6,340 new jobs. The Subic free port has an active work force of 86,631 as of October 2009.
The agency added that as of November 2009, there are a total of 1,310 approved investment projects in the Subic Bay Free-port Zone. These projects are worth a total of $5.918 billion in committed funds.
Arreza also said that the services sector is expected to keep the lead in employment generation in 2010 because Subic “is basically service-oriented.”
Subic’s thrust to become a major service and logistics hub is also expected to create more service-oriented jobs, investments and revenues in 2010. Rey Garcia