SBMA under Chairman and Administrator Jonathan Tan celebrates its 31st anniversary on Nov. 24. It is an opportune time to look back at SBMA’s history, accomplishments and move forward.
AN anniversary is an opportune time to look back at an institution’s past history, assess its accomplishments and failures, and from this point in time, move on forward.
Today, November 24, is the 31st anniversary of the Subic Bay Metropolitan Authority (SBMA). It is both interesting and important to look back at SBMA’s history, trace its journey from then until its present-day status, and predict its most likely course “as if the chart was given.”
SBMA was given life with the passage of Republic Act 7227 or the Bases Conversion Development Act of 1992. This law’s Section 13 created the Subic Bay Metropolitan Authority to develop and manage the Freeport which provides tax and duty-free privileges and incentives to business locators in the special economic zone.
Former senator Richard Gordon, then mayor of Olongapo City, became the first SBMA chairman. As the last US Navy helicopter carrier USS Belleau Wood sailed out of Subic Bay on Nov. 24, 1992, his group started the conversion of the US naval base into a free port.
On its fourth anniversary on Nov. 24, 1996, Subic Bay hosted the leaders of 18 economies during the Fourth Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit. By that time, the emerging investment haven was already hosting global business leaders like Federal Express, Enron, Coastal Petroleum, Taiwan computer giant Acer, and French telecom firm Thomson SA.
Gordon was succeeded by Bataan representative Felicito C. Payumo in 1998 during the Joseph Estrada administration, and in August 2004, then President Gloria Macapagal Arroyo issued Executive Order 340 reorganizing the SBMA Board of Directors. The order also segregated the powers of the Chairman (Francisco Licuanan) and those of the Administrator (Alfredo Antonio).
In 2006, Feliciano Salonga was appointed chairman and head of agency while Armand C. Arreza became Administrator and Chief Executive Officer. They were later replaced by Roberto V. Garcia under President Benigno Aquino III.
The Rodrigo Duterte administration appointed Martin Dino as chairman and Wilma T. Eisma as administrator, and they were followed in March 2022 by former Olongapo City Mayor Rolen Paulino.
CHAD Jonathan Tan
The onset of the Ferdinand “Bongbong” Marcos Jr. administration saw Paulino resigning and the rise of Chairman and Administrator Jonathan Tan, himself a former mayor of Pandan, Antique, serving that town from 2010 to 2019. He was named one of the country’s most outstanding mayors in 2012.
Although the SBMA processed a total of P5.56 B worth of new investments in 2019, with 156 new locators, increasing a little year on year, Chairman Tan vowed to overshoot this already creditable accomplishment.
Upon his appointment by President Ferdinand Marcos Jr. on April 28 this year, Chairman Tan immediately buckled down to work, assessing where his energy and expertise should be focused at once.
Tan saw the immediate problem of Freeport locators who have not been complying with the provisions of their contracts, particularly in the matter of rent payments.
One after another, the locators who for several months or years now are evading the payment of rentals have been served closure orders, and their places of business confiscated in favor of SBMA.
First to get the ax from the new CHAD was the Silver Arrow Import and Export Services, Inc. located at Lot 1, Boton Area, Argonaut Highway, because of its contractual defaults. The SBMA repossessed its 1,500 square meter compound.
According to Tan, the company failed to comply with its Investment and Development Commitment as provided in Section 7, Article II of the Lease Agreement between the company and the SBMA. Part of the said default is the failure of the company to develop the area with a funding allocation of at least US$1,000,000.
He added that the development commitment on the Leased Property should have a minimum cost of US$500,000 which includes the construction of a warehouse within two years from the issuance of its building permit.
“Aside from the Investment and Development Commitment, the company’s contractual default also includes non-compliance with the Omnibus Policy on Performance Bond, and failure to submit documents for the issuance of a building permit,” he said.
The said building permit is for the construction of a warehouse as stated under the company’s Development Commitment. Tan added that this is so despite the unreasonable length of time that had already lapsed since the execution of the lease agreement last July 28, 2015.
More erring locators fall
True to its mandate of utilizing land areas efficiently and making sure that locators are following good business practices, the SBMA took over three more properties inside this premier Freeport.
The agency took over two buildings from Parabion, Inc. at the Cubi Triboa District within the Subic Bay Freeport Zone. The seized or repossessed area has 1,176 square meters.
“The company has committed contractual defaults that prompted the SBMA to take over their properties. One is failure to comply with development commitments, and two, for non-payment of lease rentals and Common Use of Service Area (CUSA) fees,” Chairman Tan said.
The company has amassed a debt in CUSA close to P10 million as of July 28 of this year.
“We already sent them a final notice of default with demand to pay on November 22, 2022, then we sent them a notice of pre-termination and repossession on July 28 that was served on August 10. This is pursuant to SBMA Board Resolution No. 23-07-0173 that was approved last July 4,” Tan added.
Chairman Tan also pointed out that the agency took over Bldg. 8321 along Zambales Highway, Cubi Triboa District, and Bldg. 8359 along Bataan Road, also in the Cubi Triboa District.
The third property that was taken over by the agency was owned by Ramphos Corporation, a company that manufactures and sells amphibious ultralight aircraft.
The property is a 966-square-meter portion of Bldg. 8045-C at the Subic Bay International Airport (SBIA).
The company has an expired lease agreement with the SBMA since September 11, 2020, prompting the eventual takeover by the SBMA last September 5, 2023.
The chairman confirmed that the company has contractual defaults such as non-payment of lease rentals (building spaces), CUSA fees, ACC and SOA fees amounting nearly P10 million as of July 28 of this year.
Duty Free Superstore
The SBMA also seized the property of Duty Free Superstore, Inc. (DFSI) as the agency continues to clamp down on companies with contractual defaults.
The DFSI occupied Building 332 and its adjacent lot at Burgos St., Naval Station. With an area of 651 square meters, while the adjacent lot has an area of 463 square meters.
Duty Free Superstore Inc. has a contractual default of non-payment of lease rentals, common use service area (CUSA) fees, and other charges that amounted to P15, 932,595.16 as of March 2017.
“We conducted a clearing/ transfer of personal properties from the premises,” Chairman Tan said.
The company has a 25-year lease agreement with the SBMA dated Sept. 16, 2003, that should have ended on Sept. 15, 2028. The building and the adjacent lot was previously repossessed by the SBMA Legal Department on April 11, 2017.
Duty Free Superstore, Inc. has subsequently filed a Petition for Voluntary Insolvency at the Olongapo City Regional Trial Court, which was dismissed on Sept. 2, 2020.
“We want to continue with our thrust to repossess and reutilize idle lands inside the Freeport to promote a more efficient and vibrant business climate here,” Tan added.
During a Senate hearing with Senator JV Ejercito, Tan said that the agency has currently repossessed 10 parcels of unused land, with 20 more lined up for repossession, adding that the agency is conducting audits to ensure business vibrancy at the Freeport.
Looking forward
After this week’s 31st anniversary of SBMA, we look forward to more campaigns towards good governance and full business development initiated by Chairman Tan, to include the fight against smuggling and illegal drugs, and the perceived graft and corruption at the Freeport.
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