28 AUGUST 2009

Two developments prompted the creation of

the Subic Bay Special Economic & Freeport
Zone.
Eruption of Mount Pinatubo in 1991, the second largest volcanic

eruption of the 20th century

• 740 people killed

• 2 million people affected
• US$450 million worth of
damages
• More than 80,000 houses
destroyed/damaged
 Closure of American naval base in Subic in 1992
• Loss of 30,000 to 35,000 jobs at Subic Bay Naval
Station
• Loss of additional 50,000 to 70,000 jobs in service
establishments and businesses which produced
goods purchased by the bases
• Loss of base-related expenditures, which in 1988-89
amounted to US$344.3 million, including US$75.4
million in workers’ salaries
• Loss of some US$200 million in ODA
In the early years…
• The Subic Miracle: A story of Filipino volunteerism
• US$8 billion worth of infrastructure left by the Americans
As a bustling hub of commerce and tourism, generating
investments
• First wave of major investors
– FedEx
– Acer (now Wistron)
– Subic Telecom (AT&T / PLDT)
– Subic Bay Industrial Park
– Subic Bay Technopark
– Enron Power Plant
– Others
• US$2.7 billion in committed
Investments
• 68,890 jobs created
• US$1.3 billion export values
• Revenues of more than Php7.5
billion in customs duties
Another major highlight in the Freeport’s early years…

The Asia Pacific Economic Cooperation

(APEC) Leaders’ Meeting in Subic in 1996
 SBMA’s Mandate According to
RA 7227
The SBMA shall promote and develop
the Subic Special Economic Zone into a
self-sustaining, industrial, commercial,
financial and investment center to
generate employment opportunities in and
around the zone and to attract and
promote productive foreign investments.
 Subic Freeport and Special Economic Zone
BASIC INFO
• A 670 sq. km. commercial & tourism
destination in a high quality natural
environment accessible by land,
sea & air

• A complete port with 15 operational

piers & wharves, including a
passenger/cruise ship terminal + a fully
operational international airport with a
10,000-sqm passenger terminal & 2.7-km
runway

• A choice investment site of more than

1,000 local & foreign investors with a
cumulative committed investment of
US$5.75billion & a total workforce of
more than 87,000

• 94 years U.S. Naval Base

 Subic Bay Metropolitan Authority: Mandate

President Gloria Macapagal-Arroyo

Chairman/Head of Agency Administrator and CEO

Feliciano Salonga Armand Arreza

The Subic Bay Metropolitan Authority (SBMA) was created by virtue of Republic Act 7227 on
March 13, 1992. SBMA is the operating and implementing arm of the Government of the Philippines in
developing the Subic Bay Freeport (SBF) into a self-sustaining industrial, commercial, financial, and
investment and academe center to generate, among others, employment opportunities in and around the
Zone, and to attract and promote productive foreign investments.
SUBIC- CLARK GROWTH CORRIDOR
 Subic-Clark Area Development

A Seamless Economic Corridor

NLE Extension
(Clark-Tarlac Road)
Elements
Integrate Subic and Clark’s
world-class logistics
infrastructure to create an
economic hub that takes
advantage of Central
Luzon’s abundant flat lands

Clark Airport - Subic, Clark and Luisita

linked by a 93.8km, 4-
lane expressway (SCTEP)
North Luzon - Construction of 600,000
Expressway TEU capacity Container
Subic-Clark Terminal in Subic
Toll Road
- Upgrading of DMIA
Create thriving
communities in Central and
Northern Luzon that bring
Subic Seaport work to the people

- Abundant land for

North Rail industrial development

- Provide incentives for

SCAD Vision development of new
industrial estates
To develop the Subic-Clark Corridor into a globally competitive
through the passage of
logistics hub for the efficient movement of people, goods, the “3-2-1 Law”
services & data, in partnership with the private sector
12
- Self-contained factory
towns
 Subic-Clark Area Development
An additional US$1.5 billion in infrastructure is being put in place to further enhance the
competitiveness of the Subic-Clark area

HIGHLIGHTS COST
Clark International US$ 37.4M
Airport expansion &
upgrading
Subic Port US$
Development Project 230.0M
Subic-Clark-Tarlac US$ 504.3M
Expressway (SCTEx)

North Luzon Railway US$ 503.4

Phase 1 M
North Luzon US$ 226.4M
Expressway
Rehabilitation

13
 Subic – Clark Growth Corridor
Tourist Haven

Commercial Gateway

Software Development /
Logistics Hub
Hi-Tech Manufacturing Hub

14
 Subic Clark Alliance for Development (SCAD)
SEAPORT

AIRPORT

TELECOMMUNICATIONS, ROADS & HOUSING FACILITIES

VALUE OF INFRASTRUCTURE LEFT BY THE U.S.

SUBIC - $8 Billion
CLARK - $4 Billion TOTAL - $ 12 B
15
 Subic Bay Investments
Subic Bay is a choice investment destination for more than 1,186 companies who have invested
more than US$5.7 billion and have hired more than 87,000 workers

Number of Investors
1200 1186
1115

1000 931

800 767

638
600 571
489

400

200

0
2003 2004 2005 2006 2007 2008 2009 (Jan-
June)

16
 Subic Bay Investments
Subic Bay is a choice investment destination for more than 1,186 companies who have invested
more than US$5.7 billion and have hired more than 87,000 workers

Cumulative Investments
(US$ Billion)

6,500 6,057
5,747
5,498

5,000

3,766
3,500

2,249 2,313 2,341

2,000

500

2003 2004 2005 2006 2007 2008 2009 (Jan-

-1,000 June)
 Name of Company Committed
Investment

1. Subic Neocove Corp. US$ 175.2 M

2. Hanil E & C Subic, Inc. US$ 11.0 M
3. Sultan Ahmed Lootah Enterprises Corp. US$ 6.72 M
4. George Dewey Medical & Wellness Center, Inc. US$ 6.58 M
5. Hanafil Golf & Tour, Inc. US$ 3.0 M
6. Australasia Marine Alliance Corp. US$ 2.32 M
7. Pacific Pearl Airways Aviation School US$ 2.13 M
8. Taiwan Cogeneration Corporation (Subic Bay US$ 2.0 M
Branch)
9. Palmgold Int’l Ltd. US$ 1.9 M

10. Grand Pillar International Development, Inc. US$ 1.9 M

Total US$ 212.79 M

STATE OF THE FREEPORT ADDRESS 2009 18

 2008 ACTIVE WORKFORCE BY SECTOR

No. of workers % Share

Manufacturing 14,545 16.62%

Services 36,203 41.37%

Shipbuilding/Marine-Related Services 30,728 35.12%

Construction 5,480 6.26%

Other Services 546 0.62%

87,502 100%

STATE OF THE FREEPORT ADDRESS 2009 19

 No. of Employees %
Greenbeach Powertech, Inc. (KCThech, Inc.) 11,967 13.68%

Hanjin Heavy Industries & Construction 3,489 3.99%

Nidec (Sankyo Seiki Phils.) 2,347 2.68%

Sanyo Denki Philippines, Inc. 2,118 2.42%

Wistron Infocomm Phils. 2,064 2.36%

Subickor Corporation 1,704 1.95%

Metrobay Corporation 1,518 1.73%

Subic Shipbuilder Corporation 1,476 1.69%

Redondo Baytech Corporation 1,226 1.40%

Redondo I-tech Corporation 1,038 1.19%

Total 28,947 33.08%

STATE OF THE FREEPORT ADDRESS 2009 20

 EXPORT (US$)
2008 2007 Variance %

JANUARY 85,501,329.87 64,892,236.01 20,609,093.86 31.76%

FEBRUARY 80,224,432.82 55,496,287.59 24,728,145.23 44.56%

MARCH 66,486,887.36 86,841,155.90 -20,354,268.54 -23.44%

APRIL 70,572,323.55 65,766,217.65 4,806,105.90 7.31%

MAY 78,403,030.32 52,829,453.27 25,573,577.05 48.41%

JUNE 128,023,652.00 88,721,267.56 39,302,384.44 44.30%

JULY 78,587,776.98 87,821,335.79 -9,233,558.81 -10.51%

AUGUST 61,396,744.22 79,090,995.59 -17,694,251.37 -22.37%

SEPTEMBER 105,160,346.04 71,408,348.94 33,751,997.10 47.27%

OCTOBER 99,634,487.59 122,432,621.22 -22,798,133.63 -18.62%

NOVEMBER 75,087,158.09 112,473,616.31 -37,386,458.22 -33.24%

DECEMBER 48,769,455.51 83,963,711.89 -35,194,256.38 -41.92%

977,847,624.35 971,737,247.72 6,110,376.63 0.63%

STATE OF THE FREEPORT ADDRESS 2009 21

 Name of Company FOB value

1. Wistron Infocomm (Phils.) Corp. US$ 247.88 M

2. Lets Do Mobile Philippines US$ 234.51 M

3. Sanyo Denki US$ 78.08 M

4. Hitachi Terminals Mech. Phils. Corp. US$ 76.37 M

5. HHIC-Phils. US$ 61.74 M

6. Juken Sangyo (Phils.) Corp. US$ 44.17 M

7. Tong Lung (Phils.) Metal Industry US$ 27.94 M

8. Hitachi Air Conditioning Products US$ 20.21 M

9. Nidec Subic Phils. Corp. US$ 17.78 M

10. Nicera Philippines, Inc. US$ 13.26 M

Total US$ 849.07 M

STATE OF THE FREEPORT ADDRESS 2009 22

 Performance Indicators 2008 2007 Variance %

Revenue Php 276.24 M Php218.15 M Php 58.09 M 26.63

No. of Shipcalls 1,893 1,576 202 12.82

Gross Registered Tonnage (GRT) 12.55 M 10.84 M 2.39 M 28.38

Cargo Volume: Containerized 29,370.75 36,450.50 -7079.75 -19.42

(TEUs)
Non-containerized (MT) 1,868,334.74 1,899,780.53 -31,445.79 -1.7

SUBIC BAY METROPOLITAN AUTHORITY 23

Major Investments in Subic Bay Freeport

(Korea) Wistron Infocomm (Phils.) Corp. (Taiwan)

• Shipbuilding facility • Manufacturing of personal computers, motherboards

• US$1.6 billion committed investment • US$140 million actual investments

Nidec Subic Philippines Corp. (Japan)

• Manufacturing of micro motors

• US$80 million actual investments

24
Subic Bay’s Advantages

Opportunities for Investors

Strategic location

Dedicated Administration for sustainable growth

Existing world class infrastructure

Environment conducive to business investment

Highly qualified workforce

Magnificent natural setting

Unique combination of tourism attraction

25
Strategic Location
Subic Bay is strategically located in the center of the growing East Asian region

City Flying Sailing

Hours Time
(Days)
Kaohshiung 1.0 <2.0
Taipei 1.5 2.0
Hong Kong 1.5 2.0
Ho Chi Minh 2.5 3.0
Bangkok 3.0 4.0
Singapore 4.0 4.5
Shanghai 2.5 3.0
Seoul 4.0 4.5
Tokyo 4.0 5.0
Los Angeles 22.0

26
Dedicated Administration

The SBMA is the sole authority created to administer and develop the Freeport Zone

Subic Bay Metropolitan Authority

Established in 1992 to manage and develop the
Subic Bay Freeport into a self sustaining
industrial, commercial, logistics and tourism
center


Employees: 3,700


Chairman: Feliciano G. Salonga
Administrator: Armand C. Arreza


One-stop investment promotion, registration
and regulatory agency for the entire Subic
Bay Freeport Zone


Key Functions: Investment Promotion,
Infrastructure Development, Port
Administration, Security and Law
Enforcement, Permitting and Licensing

27
 Infrastructure
Subic Bay possesses key infrastructure that can support a wide range
of businesses
Redondo
South China Sea Peninsula

Hanjin Heavy
Camayan Wharf Industries Shipyard
(240 ha)
Nabasan Wharf Subic Bay
International Airport New Container Terminal
Cubi Point
Leyte Pier
Naval Magazine Passenger Terminal
Cubi
Ecotourism Zone Central Area
Rivera Wharf
Ship Repair
Facility
Boton Wharf Yacht Club
POL Pier Bravo Wharf
Sattler Pier
Subic Bay Boton Logistics Marine Terminal
Techno-Park Naval Supply Subic Bay Gateway Park
Center
Depot (Phase 1)
(General Cargo)

Subic Bay Gateway Park

(Phase 2)

Subic Bay Golf

Course

28
 INDEPENDENT AND RELIABLE SERVICES

Potable Water Supply Efficient Waste Management System

100,000-line Capacity Stable Power

Telecom Facilities Supply
 24-Hour Security
Monitored movements at all SBMA gates through 24-hours
Close Circuit TV monitor

911 Emergency Hotline for Fire, Medical &

Rescue Operations
30
 Incentives
Tax exemption and duty free importation are offered to all Subic Bay investors

• Exemption from all local & national taxes with only a 5% corporate tax on
gross income
• Duty free importation of raw materials and finished goods
• Liberalized foreign ownership requirements
• No foreign exchange control
• Visas available to foreign nationals (Subic Special Working Visa)
• Qualified industries may also benefit from a 4-6 year income tax holiday

31
 Highly Qualified Workforce
•
Central Luzon has a total labor pool of 3.5 Million
(3rd largest in the Philippines)

–
Subic Bay Freeport and immediate environs:
working population of 700,000

•
About 32,666 university graduates yearly

–
5,526 Engineering and Technology-related
graduates
–
9,788 Business Administration and related
courses (IT-enabled)
–
3,492 Mathematics and Computer Science
graduates

•
96.9% literacy rate

•
Fast learning curve (needs only 6-8 weeks to learn
technical skills – SEIPI study)

•
Strong work ethic and customer orientation (Gartner
Research)

•
More than 162 universities / colleges / vocational
schools in and around the Subic Freeport Special
Economic Zones
32
STATE OF THE FREEPORT ADDRESS 2009 33
 Philippine International Tourism Fair

Philippine Travel Mart

STATE OF THE FREEPORT ADDRESS 2009 34
 SBF MARITIME COMPONENTS
LEYTE PIER
IDESS NEW
Maritme Training BULKGRAIN CONTAINER HANJIN
Camayan Pier Facility Nabasan Pier AIRPORT TERMINAL TERMINAL SHIPBUILDING

WARTSILA
WARTSILA BOTON WHARF POL PIER NAVAL SUPPLY RIVERA WHARF SRF ALAVA PIER
Maritme
Maritme Training
Training DEPOT
Facility
Facility
BULK PETROLIUM CRUISE SHIP LUXURY YACHT SEAPORT
FERTILIZER LOGISTICS GENERAL TERMINAL FACILITY ADMINISTRATIO
TERMINAL FACILITY CARGO & BREAK N BUILDING
BULK

35
 Logistics Center for Central Luzon

Airport Cargo Terminal

(2009)
Upgrading and Capacity
Expansion of POL Depot
(2008-2010)

Privatization of NCT2
Redevelopment of Boton Wharf (3rd Quarter 2008)
(2009 – 2012)

Privatization of NSD
For General Cargo
(2009)

36
 High-value Export Growth in Southeast Asia
Thailand
 “The Detroit of ASEAN”
 Booming Automotive Industry
– vehicle production doubled
between 2002 – 2005 to 1.1
million vehicles
 Now the world’s biggest
producer of pickup trucks
Singapore
 Leader in high-value industry
37
SUBIC FREEPORT
The next biggest exporter
of maritime/commercial
vessels
Philippines
• Highest proportion of
high-value exports in
ASEAN
Malaysia
 Has made great strides in the
electronic and electrical exports
 Value of electronic and electrical
goods exported was US$64 billion in
2006
 This accounted for just over half of
total exports
Indonesia
 Showing some growth in the high-
value exports from a low base
 Geared towards textiles and clothing
SUBIC BAY FREEPORT
INFRASTRUCTURE
 Status of New Container Terminal 1 & 2

NEW CONTAINER TERMINAL 1 (NCT-1)

• Completed. Inaugurated by Her Excellency NEW CONTAINER TERMINAL 2
President Gloria Macapagal Arroyo.
(NCT-2)
• Contract for the Operation and Management
awarded to Subic Bay International Terminal,
Inc. (SBITC).

• SBITC completed construction of their offices,

warehouse/motorpool this month.

• The 1st ship call and unloading of container:

02 April 2008
 Subic Bay International Airport (SBIA)

The former Naval Air station is now a modern international airport

with a 10,000 sq.m. passenger terminal. The airport currently houses
FEDEX 1, the Asian distribution hub of Federal Express.
40
 AIR LINKAGES SEA LINKAGES
Diosdado Macapagal International
Airport
One of the biggest
aviation complexes in
Asia with its two 3.2
kilometer parallel
runways that will be
extended to 4
kilometers to
accommodate new
generation wide-
Subic Bay International Airport
bodied aircraft.

Orient Overseas Container Line

WAN HAI LINES LTD.

41
 Hanjin Heavy Industries and Construction Co.
Original New %
Change
INVESTMENT

Feb 2006 - Jun US$ .644 B

2007
July 2007 - 2011 1.040 B
Total US$ 1 B US$ 68 %
1.684 B
Latest Volume of Booked Contracts: $3.3
HANJIN LOCATION
Billion
PN001 June ’08 Delivery 4,300 TEUs 24.5
Knots

42
 Hanjin Heavy Industries and Construction Co.

EMPLOYMENT
Current Shipbuilding Employees : 5,315
Average Number of Construction : 5,000
Workers
Employment Plan
Y2008 : 13,080
TRAINING
Average : 1,200
Y2011pax per batch (1 batch every(vs.
: 15,800 3 months)
original plan of
Maximum : 3,400 pax per batch (1 batch every7,000)
2 months/2 shifts)
43
OTHER DEVELOPMENT PROSPECTS
Unique Combination of Tourism Attractions
Subic Bay is ONE destination for all – a place to enduldge, to reinvigorate, to escape

LIFESTYLE BUSINESS ENJOYMENT ENTERTAINMENT

CULTURE HISTORY NATURE SHOPPING

SPORTS RECREATION EXPERIENCE LEISURE

45
 Commercial District

46
 GATEWAY DISTRICT

AREA: 723.69 has.

47
 PROPOSED CONCEPT PLAN

48
 Gateway District

49
SUBIC BAY METROPOLITAN AUTHORITY
 TIPO

AREA: 152.8 has.

N
50
 TO MANILA

BPO/COMMERCIAL USE AY
APPROX. AREA= 12.8 HECTARES W
ESS
PR
EX
PO
TI
LEGEND HI-TECH MANUFACTURING
APPROX. AREA = 79 HECTARES
HI-TECH MANUFACTURING
I.T. PARK
I.T.PARK
APPROX AREA= 26 HA
SBMA OFFICES
TIPO PLAZA FUTURE EXPANSION
35 HECTARES
BPO/COMMERCIAL USE

SBMA OFFICES
TO S TIPO GATE
BF P
R OPE
R/
NSD: General Cargo
 International Destination Resorts
Cawag

Half Moon Bay

–A complete destination resort

comprising
•Hotels
•Resorts
•Golf Courses
•Retail Centers
•Marina/Yacht Club
•Cruise ship destination

–Beach capital of Luzon

–Convention capital of Luzon
–

Minanga Bay
MORONG: Beach and Golf Resort

Cubi Triboa
District

Ilanin Forest West

Ilanin Forest West

Minanga
 Minanga Bay Concept
Golf Community
Golf Course Real Estate & Holiday
Houses complement the whole golf
resort development

Beach Resort
5 Star Resort Hotel with Beach Club,
M.I.C.E Convention Centre & Water
Fun Theme Park forming the tourist
core of the area

55
 EduCity
• Bring world class education to Greater Subic Bay
• George Dewey
• Bataan Technopark
• Cubi

• Multi-varsity university environment: World’s best universities invited to

establish local facilities

• Complement growth of high-value added and service industries within

the Greater Subic Bay area

56
SUBIC BAY METROPOLITAN AUTHORITY
THE ROAD AHEAD
STATE OF THE FREEPORT ADDRESS 2009 58
STATE OF THE FREEPORT ADDRESS 2009 59
Investment Opportunities

60
 World-Class Services
Subic Bay Freeport is a self-contained urban center with world-class services

Major infrastructure Tourist attractions & Independent & Other services

& features facilities reliable services

• Bustling Seaport • Theme parks • Potable water • Medical & health

• International • Culture & history supply services
Airport • Natural • Efficient waste • Transportation
• Business district attractions management services
• No traffic • system • Eucharistic
Entertainment
• 100,000-line services
• Round-the-clock • Sports &
capacity telecom • Courier services
security & adventure
facilities •
emergency • Sun, sea & sand Banks
facilities • Stable power •
• Wellness outlets Educational
supply
Your Gateway to Business & Leisure

62