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Tuesday, November 28, 2023

Junction to progress, or to failure

“The SBMA must remember its primary duty to serve the people of Subic”

Subic Bay is a premiere Philippine free port that offers huge business and investment opportunities.

It has a strategic location and accessibility, a world-class port, an international airport, and offers incentives for investors.

Endorsed officially by the governments of the Philippines and Japan in April 2022, the Subic Bay Regional Development Master Plan is a strategic initiative designed to fully harness the potential of Subic Bay and its neighboring regions.

This plan signifies a significant step towards an investment led growth that our country needs to step up from a service oriented and consumption economy by developing a thriving manufacturing sector.

The master plan covers development projects in the fields of logistics, industry, living functions, public utilities, road network, and coastal disaster management. It also seeks to enhance the port capacity and the connectivity of Subic Bay, as well as to help decongest Metro Manila.

However, what should now be an exciting atmosphere buzzing with excitement with potential investors scrambling to seize opportunities in Subic has been upset by the decision of the Supreme Court Third Division compelling the Subic Bay Metropolitan Authority to uphold a February 2010 joint venture agreement with a company that has seemingly bypassed fundamental transparency and good governance guidelines in government contracting.

This development has undoubtedly stirred the waters, causing a nervous ripple effect in the investment landscape.

The controversial SC decision grants Harbour Center the authority to manage, develop, and operate the piers and wharves within the former US facility. Moreover, as per the JVA, Harbor Center is designated as the sole cargo handler for all goods within the Subic Freeport Zone, in other words, a monopoly.

To put some historical context to this decade old case, in 2011, the National Economic Development Administration, in fact invalidated the JVA because basic transparency in government contracts were not applied. The unsolicited proposal to exclusively run the whole Subic free port was approved within just three months and happened during the period approaching the 2010 National Elections wherein engagement in new government contracts is banned.

Current locators in the freeport zone have voiced their apprehensions regarding the implications of enforcing the JVA and have urged the Subic Bay Metropolitan Authority to clarify its stance on this matter, particularly considering its potential impact on local livelihoods, business viability, and the revenue share of the local government.

The looming question now is, what becomes of the Subic master plan that received support from the Japan International Cooperation Agency (JICA), and was endorsed by Department of Finance only last year?

Is there a risk that this could turn into a master plan for failure, jeopardizing the sustainable development and economic stability of businesses and residents in the Subic area and its neighboring regions?

The regional master plan for Subic, a product of discussions between the Philippines and Japan in 2019, was met with great anticipation and optimism.

This plan, endorsed by both governments, was designed to unlock the full potential of Subic Bay as a new major economic driver of the Philippines.

According to a statement by the DoF, “The Master Plan envisages Subic Bay region’s economic future and concrete development proposals in both public and private sectors, with which the Philippine Government unlocks the full potentials of Subic Bay, including the port capacity and the connectivity with its hinterlands, with a view to helping continued efforts to decongest Metro Manila.”

Japan, through JICA, has contributed technical support to maximize Subic’s economic development potentials. The plan covers potential development projects in various fields, including road networks, logistics terminals, and public utilities.

Some of the important projects in the plan are the road network for Olongapo’s Central Business District and Subic Bay West Coast, logistics terminals such as Alava Wharf, and public utilities such as the Philippine Coast Guard’s new support facilities, among others.

However, the SC order to resurrect the questionable Joint Venture Agreement (JVA) with Harbor Center has cast a shadow over these promising developments. The silence of the Subic Bay Metropolitan Authority (SBMA) on this matter is concerning.

The JVA, which contains an exclusivity provision, creates a monopoly that could potentially harm businesses and the livelihood of their employees. If the JVA with Harbor Center eclipses the JICA-aided Master Plan, it could jeopardize the income prospects of the free zone and the region.

The SBMA would then have to rely solely on Harbour Center’s development plan, despite doubts about the company’s financial or technical capability to undertake a project of this magnitude.

The question remains: What benefits would this bring to the people and industries of Subic? What assurances do we have that there would not be economic harm or damage done?

If there are no clear answers to these questions, then the path forward is evident. The SBMA must remember its primary duty to serve the people of Subic.

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