MARCH 17, Presented by ROBERTO V. GARCIA Chairman and Administrator, Subic Bay Metropolitan Authority

Transcription

1 MARCH 17, 2015 Presented by ROBERTO V. GARCIA Chairman and Administrator, Subic Bay Metropolitan Authority

2 The Philippine Economy in 2014

3 THE GOOD NEWS The Philippines is the Next Asian Miracle and a global model in fighting corruption, as it emerges from decades as a regional economic laggard. Jim Yong Kim World Bank President July 15,

4 PH GDP growth is second only to China in Asia PH GDP Growth PH GDP Growth % % % % 2014 (FY) 6.1% 2014 (4Q) 6.9% Source: 4

5 Ease of Doing Business in PH improves World Bank Ease of Doing Business Report Out of 189 countries: From #138 to 108 World Economic Forum (2013/2014) Global Competitiveness Index +6 Out of 148 countries: From #65 to 59 Economic Freedom of the World 2013 Annual Report +5 Out of 152 countries: From #61 to Index of Economic Freedom +10 Out of 177 countries: From #107 to 97 5

6 PH becomes more competitive PHL Jumps to 59th in Competitiveness Index Country Rank Singapore 2 South Korea 23 Malaysia 24 China 29 Thailand 37 Indonesia 38 Philippines 59 Vietnam 70 Cambodia 80 Laos 81 Source: RAPPLER.COM 6

7 Credit rating encourage investors in PH economy BB+ BBB- Outlook: Stable BBB- BBB Outlook: Stable Ba1 Baa3 Outlook: Positive 7

8 PH: Asia s most popular expansion destination Source: Survey Conducted by the US Chambers of Commerce in ASEAN, Manila Bulletin, September 4,

9 Philippines hits highest FDI 2014 US$ 6.2 B (63% higher than 2013) 2010 US$ 1.1 B 2011 US$ 2.0 B 2012 US$ 3.2 B 2013 US$ 3.8 B Source: 9

10 SBMA TODAY Key Performance Indicators

11 Revenues Per Strategic Business Unit Big revenue gains across all Freeport business sectors FPI Variance Maritime & Logistics Industrial & Commercial Leases ,115 45% 12% Tourism % Total Operating Revenues 2,013 2,442 21% 11

12 I. Maritime / Logistics Strategic Business Unit 2014 vs Classification Variance Actual Revenues PHP626 M PHP908 M 45% Containerized Cargo (in TEUs) Non-containerized Cargo (in MTs) 37,469 77,177 2,404,649 6,112, % 154% No. of Ship Calls 2,177 2,591 19% Gross Registered Tonnage 33,591,875 40,147,025 20% 12

13 Port Expansion Active participation in the Cabinet Cluster on Port Congestion and implementation of E.O. 172, designating Subic as alternate to Port of Manila To attract more shipping lines, harbor fee and berthing fees were reduced by 83% and 88%, respectively for a period of six (6) months Hosting of Traffic Summit with operators and drivers of cargo-hauling companies to discuss measures on ensuring efficient traffic flow of container trucks in the Freeport and avoiding congestion Aggressive marketing to increase port volume through speeches with the: Association of International Shipping Lines Chamber of Accredited Customs Brokers Clark and AFAB locators Philippine Ship Agents Association 8 th Philippine Ports Authority Conference on Shipping and Ports 13

14 SUBIC PORT IS NOW CONNECTED TO THE WORLD! NYK SITC MAERSK APL WAN HAI Kaohsiung Manila Tanjung Subic Bay Kaohsiung Subic Bay Subic Bay Manila Manila South Manila North Manila Jakarta Subic Bay Singapore Manila South Ho Chi Minh Xiamen Singapore Surabaya Subic Bay Singapore Busan Jakarta Kaohsiung Hong Kong Osaka Manila North Surabaya Cebu Keelung Shimizu Manila South Busan Laem Chabang Taichung Nagoya Shanghai Vostochiniy Batangas Port Kelang Yokohama Ningbo Nansha Busan Taipei Yokkaichi Hakata Tagoloan Tokyo Kobe Hong Kong Yokohama Tokyo Chiwan Nagoya Laem Chabang Malalag, Davao Chiba Shanghai Yokkaichi Shekou Cebu 14

15 II. Industrial & Commercial Leases Strategic Business Unit Investment Promotion KPI vs 2013 Total Approved Committed Investments (NEW PROJECTS) PHP 3.6 B PHP 18.5 B 414% Cumulative Investments ( ) US$ 8.7 B US$ 9.1 B 5% 15

16 Territorial expansion under E.O. 675 in cooperation with Local Government Units 10,000 hectares in San Antonio, Zambales, ideal for tourism and resort development 50 hectares of coastal land in Subic, Zambales, ideal for shipbuilding and ship repair THIS SITE 400 hectares of land in Castillejos, Zambales, viable for industrial development for light manufacturing industries and warehousing THIS SITE 900 hectares of Olongapo City viable for commercial / residential, mixed use, and eco-tourism development THIS SITE 16

17 2014 Industrial and Commercial Development PHP 11.4 B committed investment 356 jobs for manufacturing sector 388 jobs for commercial sector HANJIN additional jobs in 2014: 7,537 Total no. of workers: 25, 704

18 Investment Promotion Initiatives Supreme Court ruling upholding RP Energy s coal power in Barangay Cawag, Subic, Zambales paving the way for the construction of the plant which will provide adequate and lower priced power to the Freeport. Pastolan Ayta community s approval of a US$200-million renewable energy project in an 800-hectare area within the Aytas ancestral domain in SBFZ An increase in Hanjin s production, from 9 vessels in 2013 to 22 vessels in 2014, with a corresponding increase of 48% in export value, from US$440 million in 2013 to US$853 million last year Increase in Vale s transhipment operations by 19%. 18

19 III. Tourism Strategic Business Unit TOURISM TRAFFIC (ARRIVALS VIA SCTEX ONLY) YEAR VISITOR ARRIVALS ,697, ,398,376 TOTAL 12% 19

20 Meetings, Incentives, Conventions, and Exhibitions 2014 vs MICE & Special Events No. of Participants Classification Variance Variance International % 13,485 26,050 93% Local % 113, ,795 94% TOTAL % 126, ,845 94% 20

21 Sports Events and Participants Count 2014 vs Sports Events No. of Participants Classification Variance Variance International (6%) 12,485 21,870 75% Local % 30,730 21,830 (29%) TOTAL ,215 43,700 38% 1% 21

22 Completed Leisure Projects in 2014 Freeport Elite Resort, Inc. Completed 80-room condotel facility in December 2014 Actual Investment: PHP208 million Mansion Garden Hotel New 450-pax function room opened in December nd hotel facility to open in April 2015 Subic Grand Harbour Hotel New 70-room hotel opened in December 2014 Actual Investment: PHP95 million 22

23 Completed &/or expanded Leisure Projects in 2014 Sun Plaza Subic 37 condotel units opened in August 2014 Actual Investment: US$3 million Wow World Olympic-sized swimming pool opened in May 2014 Actual Investment, including new commercial building: PHP46 million Interpark Hotel 54-room expansion completed in 2014 Construction of commercial spaces to be complete in 2015 Moonbay Marina Villas 15 new villas completed in

24 Tourism Strategic Initiatives DOT Region III Report SUBIC IS THE NO.1 tourist destination in Central Luzon with 1.2 million tourists followed by Clark with 621,000. Subic enjoyed the highest hotel occupancy rate in Central Luzon at 69% vs. the average of 62%. 2. Signing of a 3-year MOA with the prestigious Century Tuna IRONMAN 70.3, together with the widely acclaimed Summit 5150, TRAP, and Tri-United, making Subic the undisputed Triathlon Capital of the Philippines. 3. Subic is now also known as the Theme Park Capital of the Philippines and the Sailing Capital of the Philippines. 4. Holding of the Advertising Summit, the most prestigious MICE event. 24

25 Good Governance Initiatives Improved Peace & Order COMPARATIVE CRIME VOLUME

26 Improved Security Delivery and deployment of 8 brand new service vehicles to the Law Enforcement Department (LED) to augment security efforts in the Freeport Recognition by the PNP s Anti-Illegal Drug Special Operation Task Force of LED s valuable and outstanding support to the seizure of PHP2.5 billion worth of shabu in Subic, Zambales. Substantial decrease of 75% in crime volume from 2010 to 2014 Implementation of new traffic rules and higher penalties to improve traffic discipline 26

27 National Government and LGU Shares Allocation from 5% Corp. Tax National (3%) PHP199 M PHP187 M PHP211 M PHP298 M 2014 vs % LGUs (2%) 145 M 139 M 156 M 199 M 28% TOTAL 344 M 326 M 367 M 497 M 36% 27

28 GOOD GOVERNANCE Jobs, Exports and Govt. Collections 2014 vs KPI Variance Employment 89,584 96,958 Export (FOB-US$) US$ 1.4 B US$ 2.3 B 9% 58% BIR Cash Collection PHP 1.4B PHP 1.8B 27% BOC Cash Collection PHP 11.3B PHP 15.3B 36% 28

29 Good Governance Initiatives Managements efforts to upgrade employees salaries resulted in the President s approval of the 10% increase retroactive to January 2013 with back wages of PHP48 million. The last salary increase of employees was 6 years ago. Management has further budgeted in 2015 a total of PHP400 million in salary increase under the Standard Salary Law retroactive to SBMA gave PHP243 million in dividends to the National Govt.. SBMA ranked No. 9 among the 39 GOCCs after not having remitted dividends since Institutionalization of Integrity Program in SBMA and signing of Integrity Pledge by Freeport locators as a shared commitment to adhere to ethical business practices Signing of IRR with the Pastolan Aetas and NCIP, thus paving the way for the full implementation of the Joint Management Agreement Holding of First Women s Summit in SBFZ to promote the welfare and development of womenfolk Renewal of ISO 9001 certification due to no major audit deficiencies 29

30 Environmental Protection Strict implementation of Permit to Transport Effluent and Sewage Donation from the proceeds of the Chairman s golf tournament of 2 military jeeps now used for forest patrols to eradicate illegal logging and kaingin practices Launch of Ecology Dept. s Guard My Nest sea turtle conservation program for stakeholders to make their establishments more pawikan-friendly Increase in the following environmental protection efforts: 17% in the number of trees planted in the Freeport; 250% in the number of biodiversity inspections/monitoring activities of the Multi- Tripartite Monitoring Team; and 120% in the Ecology Dept. s Terrestial Conservation Monitoring activities Holding of First Water Summit Participation of SBMA in the International Coastal Clean-up activity 30

31 Other Accomplishments Hosting of the International Network of affiliated Ports (INAP) s 16th General Assembly and Symposium, focusing on mutual opportunities and cooperation in light of the ASEAN Integration Elevation of the SBMA Rescue Team to the Hall of Fame of Gawad Kalasag Best Government Emergency Response Team Increase of 22% in the Freeport s active manpower employed in the shipbuilding and other marine-related services sector, 16% in the domestic helpers/caretakers sector, and 14% in the services sector Improved environment and beautification of the Freeport through continuous implementation of Operation Facelift. 31

32 Financial Performance 2014: A Third Record Year

33 SBMA GROSS REVENUES 2014 is HIGHEST ever. Millions 2, ,442 2, ,020 21% 1, ,180 1,410 1,400 1,310 1,560 1,540 1,340 1,670 1,600 1,500 1,570 1,630 1,570 1,470 1,420 1,400 1, (400.00) 33

34 SBMA GROSS REVENUES Millions Existing Revenues New Revenue/Cost Recovery Initiatives 3,000 2, ,500 2, ,000 1,500 1, (0%) 1, (11%) (27%) (35%) 1, , (100%) 1, (89%) 1, (73%) 1, (65%)

35 SBMA OPERATING INCOME (EBITDA) 2014 is HIGHEST ever. Millions % EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization 35

36 SBMA NET INCOME 2014 is HIGHEST ever. Millions ,110 1,556 40% ,203-1, ,540 36

37 BENCHMARKING

38 SBMA is the largest and most progressive Freeport PHILIPPINE ECOZONES & FREEPORTS Particulars SBMA PEZA CDC CEZA AFAB PPMC TOTAL ASSETS 28,089,039,000 5,971,132,000 5,722,137,240 5,475,883,000 1,502,943,911 97,193,218 TOTAL LIABILITIES 11,114,149,000 1,718,146,000 2,228,207, ,658, ,169,802 36,422,074 TOTAL EQUITY 16,974,890,000 4,252,986,000 3,493,929,538 5,188,225, ,774,109 60,771,144 REVENUES 2,954,140,000 7,979,394,000 1,303,999, ,963, ,966,671 66,259,000 EXPENSES 1,788,292,000 6,501,079, ,032, ,862, ,436,539 69,215,000 NET INCOME (LOSS) 1,110,450,000 1,036,920, ,736, ,338,000 7,530,133 (4,278,035) Source: COMMISSION ON AUDIT 38

39 2014 Approved Investments (In PHP Million) 18, , , , ,

40 SBMA Prospects 2015 and Beyond

41 Projected Economic Growth Philippines is expected to register the 3 rd highest GDP growth in the world! Projected Change in REAL GDP in 2015 Country GDP China 7.1% India 6.4% PHILIPPINES 6.2% USA 3.1% UK 2.7% Canada 2.4% Japan 0.8% Source: WORLD ECONOMIC OUTLOOK, Oct

42 What We Face in 2015 THREATS Looming power shortage in Luzon and Visayas this summer due to inadequate power capacity and high power demand during summer Effect of Fiscal Incentives Rationalization bill on non-peza enterprises located inside economic zones and free ports National Government s study to build a mega port outside Metro Manila in anticipation of container volume build-up in 5-8 years Political activities in anticipation of 2016 National and Local Elections PHL s 101st ranking out of 144 countries in terms of port infrastructure, which is the lowest among the ASEAN-6 (Source: 2014 WEF Global Competitiveness Index ) 42

43 What We Face in 2015 OPPORTUNITIES SBFZ s role in ASEAN Integration as an extension of the Port of Manila, transshipment hub, logistics center, manufacturing base, and cruise destination Congestion in the Ports of Manila, Batangas, and Cebu Major PPP projects by the National Government in the offing, like the Tarlac-Pangasinan- La Union Toll Expressway and the NLEX-SLEX Link Connector, both of which will improve the Freeport s accessibility Integrated and simplified NLEX-SCTEX toll payment system to be completed before end Inclusion of Subic with the ports of Davao, Bohol, Boracay, Cebu, Metro Manila, Puerto Princesa, and Zamboanga in PPA-DOT s list of eight (8) ports billed as the country s top international hubs for cruise liners 43

44 2015 Strategic Initiatives Strategic Directions Move from over-regulation to developmental mode Expand Freeport area to accommodate more investors Capitalize on Philippines economic boom by aggressive marketing of the Freeport to attract more investments Focus on game-changing projects Institutionalize Good Governance initiatives 44

45 I. Maritime/Logistics Strategic Initiatives 1. Aggressive promotion of the Freeport Container Terminal to increase capacity utilization, targeting at least 120,000 TEUs or 20% utilization 2. Expand Tipo Road to ease expected traffic congestion 3. Initiate feasibility study on expansion of container port to 1.2 million TEUs, as well as new bypass road to connect directly to SCTEX 4. Hold 2 nd Maritime Summit in April 24 to convince more Central Luzon shippers to use Subic Bay 5. Support Hanjin, as well as the other boat builders, to further expand their operations and employment 6. Support VALE, as well as other logistics hub enterprises, to expand operations 45

46 II. Industrial and Commercial Leases Strategic Initiatives 1. Initiate the development of additional industrial parks, totaling at least 500 hectares, to accommodate new investors in cooperation with LGUs with suitable areas 2. Attract big BPOs to locate in the Freeport, targeting at least 15,000 call center agents in the next 3 years 3. Promote the Freeport among residential developers for additional housing 4. Bring in high value added and high technology industrial firms 46

47 III. Tourism Strategic Initiatives 1. Aggressively market the Freeport to increase MICE and sports events 2. Launch a branding and promotional campaign to project tourism potential of the Freeport 3. Participate in important trade fairs to generate interest in the Freeport s tourism programs 4. Renovate SBECC and other tourist facilities 5. Continue promoting the Freeport as the Theme Park, Triathlon, Sailing, and Sports Capital of the Philippines. 47

48 Ongoing Leisure Projects for completion in 2015 Edgewater Int l. Trade & Development Corp. 32-room hotel Committed Investment: PHP20 million Subic Bay Peninsular Hotel Total of 90 hotel and function rooms Vascos Hotel and Restaurant Expansion from 14 to 22 hotel rooms Grand Pillar International Four-storey building with swimming pool and elevator Est. Total Project Cost: PHP240 million Sands of Triboa Resort Phase 1: 110 world-class hotels and resort rooms Total Projected Investment, including residential development project for completion in 2019: PHP659 million 48

49 Good Governance Strategic Initiatives 1. Make business environment more friendly and convenient for locators with new CRTE process 2. Further improve employees salaries by securing DBM/OP approval of SSL in Formulate new organizational set-up for better focus and efficiency of operations 4. Continue crusade against corruption by getting all stakeholders to sign Integrity Pledge 5. Continue to improve peace and order in the Freeport by further reducing crime rates and protecting our forests and waters. 6. Invest PHP800 million CAPEX to upgrade long neglected equipment and infrastructure 49

50 2015 CAPEX PROGRAMS 1 ROAD AND BRIDGES PROJECT 53.0 NSD Road Network 37.5 Detailed Engineering of Magsaysay Bridge 4.4 Rehabilitation of Aparri Road sets of unified directional signages PORTS IMPROVEMENT 11.8 Enhancement of Off-shore Approach Light Barette Steel Piles 2.5 Refurbishment of airfield signage and markers 3.0 Rehabilitation of rubble mound for barette light runway Strengthening of Existing Seawall at GTI Area 1.0 Connection of Permanent Power NSD New Warehouse ENHANCEMENT OF SBMA OPERATIONS Biometrics Timekeeping 1.9 ERPS 50.0 Desktop Computers and other related IT Equipment 58.0 Construction of Storage Area 1.5 Construction of Toll Booth at Tipo PURCHASE OF SERVICE VEHICLES units of CUV/Pick up/passenger Van/AUV units of bus/mini-bus

51 2015 CAPEX PROGRAMS 5 SECURITY AND SAFETY PROJECTS units of patrol boat/rubber boat/dive boat 8.6 CCTV 60.0 Rifles and ammunitions units highway patrol IMPROVEMENT OF SBMA SERVICES units Heavy Equipment (dump truck, dropside, compactor) DISASTER READINESS (RISK REDUCTION) 62.0 I unit of Structural Fire Truck unit of military/stake truck 24.0 I unit of ambulance CORPORATE SOCIAL RESPONSIBILITY 12.0 Construction of two (2) Classroom HS Building and Clinic at Pastolan COMPLIANCE WITH NATIONAL DEVELOPMENT PROGRAM 2.0 Gender and Development/Day Care OTHERS SBMA Corporate Center TOTAL

52 Focus on inclusive growth over the next 5 years INDUSTRY SECTOR SOURCE NO. OF JOBS NATURE OF JOBS TOURISM & SERVICES 10,000 SHIPBUILDING 10,000 BPO 20,000 MANUFACTURING 5,000 MARITIME & LOGISTICS 5,000 HRM, Hotel Staff, Chefs, Nutritionists, Back Office Welders, Painters, Design Engineers, Naval Architects, Scaffolders Call Center Agents, IT Technicians, Design Engineers, Web Design Specialists, Medical Transcriptionists Factory Workers, Technicians, Production and Quality Supervisors Warehousemen, Shipping Specialists, and Customs Brokers TOTAL: 50,000 JOB PROSPECTS 52

53 SBMA contribution to the National Economy 2014 vs KPI Variance BOC Php11.2B Php15.3B 36% BIR Php1.4B Php1.8B 27% Govt. 3% GIE share Php211M Php298M 41% LGU 2% GIE share Php156M Php199M 28% Dividends 0 Php243M TOTAL Php12.96B Php17.84B 38% 53

54 THE GOOD NEWS The good news never gets old because it just keeps getting better for the Philippines. (President Aquino in his roundtable discussion with CEOs and senior officials from the US Chamber of Commerce and the US-ASEAN Business Council in New York on September 23, 2014) 54