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Business

Subic’s revelations

HIDDEN AGENDA - Mary Ann LL. Reyes - The Philippine Star

When I was invited and said yes to go to Subic and stay at Le Charme Suites, the main sponsor and brains behind the first Frike (fun, ride, bike) Enduro Challenge, little did I know that I was in for a number of major revelations.

Le Charme is one of those pleasant surprises. Strategically located and easy to find as it is very near the entrance to the Subic Bay Freeport, the hotel is perfect both for individuals, families and groups for their staycations but also for those on business trips.

On our first day, we were served Le Charme Cafe’s famous tsokolate batirol as well Le Charme Suite managing director Josephine Floresca’s most recent concoction of pesto pasta with tinapa. Dinner was at Teppan 101 where they marveled us not only with the chef’s acrobatic display of flying cooking utensils but also the sumptuous seafood and meat teppanyaki.

After dinner, we proceeded to the roof top for our karaoke night, followed by a much needed traditional hilot plus Ventosa massage.

Le Charme was actually an endeavor of a group of Taiwanese investors, led by Dr. Johnson Yang, widely acknowledged as a “Subic guru” and chairman of the Subic-based Grand Pillar International Development Inc.

Way back in 2007 after the Americans left the then Subic Naval Base, the Subic Bay authorities bid out a project to convert around 101 military officer houses into retirement homes. Dr. Yang’s group undertook the project as well as the manufacturing of the Subic industrial park. According to Ms. Floresca, Dr. Yang was actually responsible for bringing in around 70 percent of the Taiwanese manufacturer-locators to Subic.

In terms of the number of manufacturing locators inside the Subic Bay Freeport zone, Taiwanese investors now account for about 30 percent of Subic’s locators from a high of 70 percent, with Wistron, which manufactures Acer laptops, still the biggest. In terms of the number of workers, Datian, which makes the Vans brand of shoes, has the largest at 300 factory workers.

But expect more investors from Taiwan to be coming in.

I learned that the PPP (public-private partnership) group in Taiwan is submitting a proposal to the Subic Bay Metropolitan Authority (SBMA) to create an airport city/smart city inside Subic that would serve as their model and prototype for similar developments in Taiwan.

Ms. Floresca, who is an active member of the Subic Bay Freeport Chamber of Commerce now led by Subic Water president Benjie Antonio, also told me that Subic’s biggest real estate developer which is the MSK Group (of Triboa Bay) is actually building four new residential towers as well as a number of villas in the forest area. MSK is also inviting more Taiwanese investors to come into the country.

Another exciting development in Subic of course is the acquisition by US-based private equity firm Cerberus Capital Management of the Hanjin shipyard in Subic Bay.

It has been reported that Cerberus bought the debt-laden shipyard for $300 million. Foreign Affairs Secretary Teddyboy Locsin described the transaction as the biggest PPP in the 75-year history of Philippine-US relations.

While Subic airport is no longer commercially operational, Ms. Floresca said this not a problem for Subic locators as well as prospective investors due to the proximity of Clark airport as well as the upcoming Subic-Clark cargo train project.

Now what?

There is nowhere for the amount of foreign investments in the Philippines to go but up.

With the signing of Republic Act 11659 which amended the antiquated Public Service Act, a number of economic activities have been opened up to foreign ownership. Only electricity distribution and transmission, petroleum and petroleum products pipeline transmission systems, water pipeline distribution systems and wastewater pipeline systems including sewerage pipeline systems, seaports, public utilities, as well as all concessionaires, joint ventures, and other similar entities that wholly operate, manage or control for public use these sectors are classified under the new law as public utilities. This means that other private businesses that used to be considered as public utilities, like telecommunications, are now open to 100 percent foreign equity ownership.

In addition, the recently amended Retail Trade Liberalization Act reduced the minimum paid-up capital required of foreign retailers to P25 million, with the minimum investment requirement per store also now down to P10 million.

There is also an increased flexibility when it comes to the guidelines on paid-up capital. These capital requirements shall be reviewed by the Securities and Exchange Commission, Department of Trade and Industry, and the NEDA every three years.

The new RTLA also now gives the SEC the power to monitor and regulate foreign retailers together with the DTI.

Back in 2018, the 11th Foreign Investments Negative List allowed full foreign participation in the internet business, investment houses and lending companies, and teaching at higher education levels, among others.

All these changes in the law would not bear fruit, unfortunately, unless government regulatory agencies do their job.

For instance, what’s the use of classifying certain industries as nationalized, partly nationalized, or fully liberalized and open to foreign equity if business entities use corporate layering as well as dummies to hide the true extent of their foreign equity ownership.

While the heart of our policies may be in the right place, foreign companies also put a premium to how these are implemented.

By expediting cases for violation of nationalization laws, punishable under the Anti-Dummy Law as a crime, our government can show that it is while our country is opening its doors to foreign investments, it will also ensure that the playing field is level and that the rules of the game are strictly enforced.

 

For comments, e-mail at [email protected].

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