2012 State of the Freeport Address

Presented by ROBERTO V. GARCIA Chairman and Administrator

Subic Bay Metropolitan Authority

2011 vs. 2010

Performance Review

2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s

Key Performance Indicators

CUMULATIVE INVESTMENTS

(1992 - 2011)

Year Committed Investments

(Cumulative)

2011 US$8.403 B

2010

US$7.167 B

Up by

17%

Key Performance Indicators

COMMITTED INVESTMENTS FROM

NEW PROJECTS

Year Committed Investments

2011 US$1.236 B

2010 US$1.210 B

Up by

2%

Key Performance Indicators

2011 FOREIGN AND LOCAL INVESTMENTS

5 S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y

US$160 M

US$1,074 M

Foreign Direct Investment Local Investments

Key Performance Indicators

TOTAL JOBS GENERATED

Year No. of Workers

2011 88,957

2010

88,450

Up by

0.57%

Key Performance Indicators

BIR & BOC Cash Remittances

to National Government

Collecting

Agency 2011 2010

BIR PhP 1,106,889,030.79 PhP 1,706,288,635.14

BOC PhP 6,053,353,210.12 PhP 4,973,793,844.44

TOTAL PhP 7,160,242,241.00 PhP 6,680,082,480.00

The Problems We Face

2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s

Huge financial losses

O F F I C E O F T H E C H A I R M A N A N D A D M I N I S T R A T O R

Gross Revenues vs. Net Income

TOTAL CUMULATIVE LOSS: PhP 7 Billion

(3,000,000,000.00)

(2,000,000,000.00)

(1,000,000,000.00)

0.00

1,000,000,000.00

2,000,000,000.00

3,000,000,000.00

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Gross Revenue

Net Profit / Loss

Low lease rates

Lack of land for new investors

11 S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y

Land Resource No. of Hectares % of Total

Total Land Area 67,452 ha. 100.00

Less:

Protected Areas

Undevelopable Areas

Leaseable Areas

53,852 ha.

10,341 ha.

2,959 ha.

79.84

15.33

04.39

Leasable areas available for

new investors 300 ha. 0.44%

Under-utilized Airport

12 S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y

SBIA Comparative Revenue vs Expenditure [2005-2011]

(in PhP thousand)

Year Annual Revenue Annual Expenditure Net Cash Flow after Debt

Servicing

2005 255,187 59,763 30,306

2006 219,035 57,451 2,468

2007 193,948 53,848 -11,386

2008 176,410 52,234 -30,311

2009 126,434 44,072 -74,070

2010 31,368 32,003 -154,969

2011 36,571 37,128 -151,797

Under-utilized Container Terminal 1

13 S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y

CONTAINERIZED CARGO VOLUME (in TEUs)

Year Total Cargo

Volume Growth Rate Capacity Utilized

2007 24,958 8.32%

2008 21,184 -15.12% 7.06%

2009 21,906 3.41% 7.30%

2010 25,661 17.14% 8.55%

2011 27,671 7.84% 9.22%

Total

Capacity Average Annual

Volume (2007-2011) Unutilized Capacity

300,000

TEUs 24,275.90 TEUs

(8% of total capacity) 275,724.10 TEUs

(92% of total capacity)

Five-year

Strategic Plan

2012-2016

2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s

Develop Tourism Niche Markets

Operation Facelift

Development focus

Theme Park Capital of the Philippines

Top Sports Tourism Destination

Cruise Ship Destination

Eco Tourism Activities

16 S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y

Promote Maritime Businesses

DOTC’s support to attract maritime logistics players to do

business in the Port of Subic

Build container volume by matching business interests of

major Luzon shippers & shipping lines

Maximize Vale ore transhipment project

Develop Subic as homebase for Super Yachts

Increase repair & maintenance facilities for boats & ships

17 S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y

Develop Housing

Development of various residential types for specific

markets:

• High-end residences

• Middle class housing

• Workers’ dormitories

18 S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y

Rationalize Industrial & Commercial Leases

Shift from landlord to developer

• Development of unutilized & idle properties

Focus on high-value industrial

& commercial leases

Provide environment for investors

to become competitive & successful

• Improved ease of doing business

• Competitive cost of doing business

19 S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y

Conversion of SBIA into an Integrated Family-

oriented Tourist Destination

20 S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y

Good Governance

Platform

2 0 1 1 S t a t e o f t h e F r e e p o r t A d d r e s s

Principles of good governance

22 S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y

GOOD

GOVERNANCE

Accountability Openness

& Transparency

Stewardship Integrity

Good Governance Initiatives

Adopted new By-laws & Code of Ethics

Created board committees such as:

1. GOVERNANCE

2. FINANCE

3. AUDIT & RISK

4. CORPORATE COMMUNICATIONS

5. SIGNATURE PROJECTS

Reviewed & audited all existing problematic contracts

Conducted Social Acceptability Process among all concerned

stakeholders for coal power plant

Acted on COA’s Turnover Audit recommendations

Restructuring loans to meet SBMA’s financial obligations

23 S U B I C B A Y M E T R O P O L I T A N A U T H O R I T Y

Let the lessons of the past

and the opportunities of today

help us realize the vision of

the New Subic that we dream of...