-BREAKING YEAR

March 16, 2016

Presented by

ROBERTO V. GARCIA
Chairman and Administrator, Subic Bay Metropolitan Authority

The Philippine
Economy in 2015

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

Philippines is the worlds 2nd fastest growing economy!

Global Competitiveness

PH GDP Growth

2010

7.7%

2011

Country / Economy

BBB- (Positive)

3.7%

2012

6.8%

BBB (Stable)
2013

7.2%

2014

6.1%
Baa2 (Stable)

2015

5.8%

Singapore

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

Source: 2015 World Economic Forum

Source: www.gov.ph

2015
2014
(out of 140) (out of 144)

Foreign investors show continued confidence

2014
US$ 6.2 B

2013
US$ 3.8 B

2015
US$ 5.7 B

2012
US$ 3.2 B
2011
US$ 2.0 B

2010
US$ 1.1 B

Source:

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

21%

Industrial &
Commercial
Leases

1,115 M

1,147 M

3%

19.6 M

20.0 M

2%

2,442 M

2,755 M

Tourism
Total Operating
Revenues

13%

Maritime and Logistics Strategic Business Unit

PORT OPERATIONS LEADS 2015 GROWTH
Classification

2014

2015

Increase

Actual Port
Revenues

PHP 884 M

PHP 1.08 B

22%

Containerized Cargo
(in TEUs)

77,177

123,510

60%

Non-containerized
Cargo (in MTs)

6,112,644

7,568,005

24%

No. of Ship Calls

2,591

3,353

29%

Gross Registered
Tonnage

40,147,025

54,381,189

13%

One-Stop Shop Center at NCT 1 opens

(BOC-SBMA-SBITC)

Inaugurated
on April 24, 2015
by Cabinet Secretary
Jose Rene Almendras

Maritime and Logistics Strategic Business Unit

AIRPORT REVENUES AND LEASES SURGE
Classification

2014

2015

Variance

Airport Revenues

PHP 36.2 M

PHP 75.9M

121%

Hangar Lease

PHP 28 M

PHP 70 M

150%

Royalty Income

PHP 0.24 M

PHP 0.30 M

23%

10

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 Freeports role in the
national security strategy
Astro Airs chartered flights, bringing Taiwanese tourists to Subic

11

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

12

Industrial and Commercial Leases Strategic Business Unit

APPROVED COMMITTED INVESTMENTS EXPAND

KPI

2014

2015

Total Approved
Committed
Investments

PHP 18.5 B

PHP 22.8

Cumulative
Investments
(1992-2015)

US$ 9.1 B

US$10 B

INCREASE

23%

10%

13

Hanjin Performance
Philippines is now the 4th largest shipbuilder in the world
TOTAL INVESTMENT

EXPORT VALUE
Classification

US$ 2 Billion

No.

Amount

Vessel

91

US$4.84B

Steel Structure

10

US$0.09B

37% INCREASE IN DIRECT AND INDIRECT EMPLOYMENT IN SUBIC SHIPYARD

30,000

25,000

33,863

20,000

24,652
15,000

20,005

20,113

19,845

18,167

10,000

2011

2010

2012

2013

2014

December
2015

14

Job Generation Per SBF Industry Sector

4,693 ADDITIONAL JOBS CREATED IN 2015
Sector

2014

2015

Services

45,342

48,396

Shipbuilding &
Marine-related

33,109

35,501

Manufacturing

15,076

14,533

3,431

3,221

96,958

101,651

Others

TOTAL

15

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

16

Resurgence of Manufacturing Industry in SBF

Harbor Star Subic Corporation

Marine-related ancillary services
Proposed Investment Commitment: US$4.56 M
Ropali-Teco Corporation
Manufacturing / assembly of electric vehicles
Proposed Investment Commitment: US$1.2 M
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
Proposed Investment Commitment: US$5.325 M

Datian Subic Shoes Inc.

Manufacturing & export of vulcanized shoes
Proposed Investment Commitment: US$10 M

17

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.

18

2015 Mabuhay Business Awards

LIST OF AWARDEES
(In alphabetical order)

Anglo Asia Commodities Corporation

Royal Duty Free Shops, Inc.

HHIC-Phil, Inc.

Sanyo Denki

Honeywell Ceasa (Subic Bay) Company,

Inc.

S-Corp Philippines, Inc.

Subic Bay Freeport Grain Terminal
Services, Inc.

Moon Kkang Talk, Inc.

Petron Freeport Corporation

Subic Bay International Terminal

Corporation

PLDT Subic Telecom, Inc.

Subic Bay Town Center, Inc.

Philippine Coastal Storage and Pipeline

Corporation

Tong Lung Phils. Metal Industry Co., Inc.

19

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

20

Tourism Strategic Business Unit

YEAR

VISITOR
ARRIVALS

2014

6,398,376

2015

7,729,484

INCREASE

14%

21

Tourism Traffic
YEAR

TOURIST ARRIVALS

HOTEL OCCUPANCY
RATE

2014

1,177,073

64%

2015

1,429,040

70%

INCREASE

21%

9%

22

MICE Events and Participant Count

MICE EVENTS
CLASSIFICATION

2014

INTERNATIONAL

10

15

LOCAL

268

TOTAL

278

NO. OF PARTICIPANTS

2015 VARIANCE

2014

2015

VARIANCE

50%

26,050

18,320

-30%

275

3%

219,795

231,297

5%

290

4%

245,845

249,617

2%

23

Sports Events and Participant Count

SPORTS EVENTS

NO. OF PARTICIPANTS

CLASSIFICATION

2014

2015

VARIANCE

2014

2015

VARIANCE

INTERNATIONAL

17

28

65%

21,870

23,705

8%

LOCAL

59

54

-8%

21,830

37,765

73%

TOTAL

76

82

8%

43,700

61,470

41%

24

Total Events and Participant Count

TOTAL EVENTS

NO. OF PARTICIPANTS

CLASSIFICATION

2014

2015

VARIANCE

2014

2015

VARIANCE

INTERNATIONAL

27

43

59%

47,920

42,025

-12%

LOCAL

327

329

1%

241,625 269,062

11%

TOTAL

354

372

5%

289,545 311,087

7%

25

2015 Major Events

26

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 Clarks 560 likes in FB, as of December 31, 2015)

27

Other Tourism Promotion Initiatives

86,588TOTAL
FOOT
TRAFFIC

22,500TOTAL
FOOT
TRAFFIC

27,000TOTAL
FOOT
TRAFFIC

57,725TOTAL
FOOT
TRAFFIC

28

Hotel and Resort Accommodations

HOTEL OCCUPANCY RATE IMPROVES
TOTAL NO. OF OPERATIONAL HOTELS / RESORTS

HOTEL OCCUPANCY
90%
80%

CY 2014

40

CY 2015

44

10%

GROWTH RATE

70%
9%

60%

TOTAL ROOM ACCOMMODATIONS

50%
40%

CY 2014

2,964

CY 2015

3,219

9%

GROWTH RATE

30%
HOTEL OCCUPANCY

20%
10%

2014

2015

CY 2014

64%

CY 2015

70%

2015 ANNUAL RATE

9%

29

SBMA contribution to the National Economy

CONTINUOUS GROWTH IN SBMA CONTRIBUTION

KPI

2014

2015

Variance

BOC

PHP15.3B

PHP16.4B

7%

BIR

PHP1.79B

PHP1.73B

3%

PHP308M

PHP373M

21%

LGU share (2%)

PHP206M

PHP248M

21%

Dividends

PHP243M

PHP527M

117%

TOTAL

PHP17.8B

PHP19.3B

8%

Locators Income Tax

NG share (3%)

Locators Income Tax

30

National Government and LGU Shares

BIGGER REMITTANCES FROM SBMA
Allocation
from 5%
Corp. Tax

2011

2012

2013

2014

2015

2015
vs
2014

(in Million Pesos)

National

PHP222

PHP205

PHP235

PHP308

PHP373

21%

LGUs

147

137

157

206

248

21%

TOTAL

PHP369

PHP342

PHP391

PHP515

PHP621

21%

(3%)

(2%)

31

GOOD GOVERNANCE
Jobs and Exports
STEADY GROWTH IN EMPLOYMENT AND EXPORTS
KPI

2014

2015

Variance

Employment

96,958

101,651

4.8%

Export

US$ 2.3 B

US$ 2.5 B

8.7%

(FOB-US$)

32

Good Governance Initiative

2007 - 2015 Comparative Crime Volume
DECREASING CRIME INCIDENTS
350
295

300
250

195

200
150

128

116

106

100
47

50

38

29

20

0
2007

2008

2009

2010

2011

2012

2013

2014

2015

33

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

34

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

35

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 Bays 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

36

Financial Performance
2015: ANOTHER CHART-BUSTER
YEAR

SBMA Gross Revenues

2015 IS HIGHEST EVER

3,000

2,755
2,442

2,500

13%

2,020
2,000

1,630

1,540 1,500 1,570

1,500

1,400

1,310

1,000

800

500

200
0
1993

1996

1999

2002

2005

2008

2011

2012

2013

2014

2015

38

2011-2015 SBMA GROSS REVENUES

Existing Revenues

New Revenues / Cost

Recovery Initiatives

3,000.00

941.66
846.67

2,500.00

544.9

2,000.00

184.02
1,500.00

60.61

1,000.00

1,338.16

1,443.35

1,475.06

2011

2012

2013

1,813.34

1,594.94

500.00

0.00

2014

2015

39

SBMA Operating Income (EBITDA)

2015 IS HIGHEST EVER
1,600

1,484
1,391

1,400

7%

1,200
1,000

920
779

800

627

550

600

435

361

400

359

329

2008

2011

200

39
0
1993

1996

1999

2002

2005

2012

2013

2014

2015

EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization

S

40

SBMA Net Income

NET INCOME WITHOUT
UNREALIZED
GAIN (LOSS) ON
FOREIGN EXCHANGE

NET INCOME WITH GAIN (LOSS)

ON FOREX REVALUATION
2000

1,200

1556

1500

1,016

1110
800

1000
500

1,000

797

805

135

26%

800

0
1993

-500

1996
-82

-185

-1000

1999

2002

-106

2005
-102

2008

2011

2012

2013

2014

2015

600

-1119

-1500

400

-2000

200

-2500
-2540

-3000

0
2014

2015

41

BENCHMARKING

Comparative Figures among Luzon Free Ports

WE ARE THE LARGEST AND MOST PROGRESSIVE FREE PORT
Particulars

SBMA

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

1,110,450,000

331,736,917

200,338,000

7,530,133

(4,278,035)

NET INCOME
(LOSS)

CDC

CEZA

AFAB

PPMC

Source: COMMISSION ON AUDIT

43

Guest Arrival Market Share

REGIONAL DISTRIBUTION OF TRAVELERS
Region III Central Luzon

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

CLASSIFICATION

Total Overseas Filipinos

31,027 Source: Department- Of Tourism

44

Still the top tourist destination in Central Luzon

TOP CENTRAL LUZON DESTINATION

FOR TWO (2) CONSECUTIVE YEARS

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

NO. 7 FRIENDLY DESTINATION

IN THE PHILIPPINES

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

45

Increased interest in Subic Bay Freeport as a destination

SUBIC
AMONG GOOGLE PHS
2015 MOST SEARCHED
DESTINATIONS

46

Subic Bay Freeport: The Best in Asia and the Philippines

SBMAS FIRST INTERNATIONAL
RECOGNITION AND GLOBAL
AWARDS

fDi Magazine is a publication of Financial Times of London

47

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 years El Nio, 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

49

What We Face in 2016

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

showed in global survey by Grant Thorntons 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

50

What We Face in 2016

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

51

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

53

Industrial and Commercial Leases Strategic Business Unit

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

54

Industrial and Commercial Leases Strategic Business Unit

2016 TARGETS
5. Approval and award of Bay 1, Bldg. 1026 to a new lessee

Projected lease rental revenues: PHP6.72 million per annum

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

resort developer

Estimated committed investment: US$50 million

Projected lease rental revenues: PHP19.5 million per annum

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

55

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.

ASTC Subic Asia Cup

2016 Christmas Celebration

and New Years 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

56

Leisure Projects in the Pipeline

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

57

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

58

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 Womens Month in SBFZ to promote the welfare and development of

womenfolk under a progressive GAD program.

59

INCLUSIVE GROWTH
INDUSTRY SECTOR SOURCE

NO. OF JOBS

NATURE OF JOBS

10,000

HRM, Hotel Staff, Chefs,

Nutritionists, Back Office

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

5,000

Factory Workers, Technicians,

Production and Quality Supervisors

MARITIME & LOGISTICS

5,000

Warehousemen, Shipping
Specialists, and Customs Brokers

TOURISM & SERVICES

SHIPBUILDING

Target: Additional 50,000 Job Prospects

60

THE GOOD NEWS

The Philippines is projected to become one of the worlds 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

61

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-stateof-the-freeport-address

THANK YOU.