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John Forbes, senior adviser of the American Chamber of Commerce of the Philippines

The Joint Foreign Chambers of Commerce (JFC) of the Philippines is making a new push to develop Subic and Clark, freeport zones north of the capital Manila, into a unified industrial/service/tourism complex.

At the recently concluded Clark Aviation Conference, John Forbes, senior adviser of the American Chamber of Commerce of the Philippines (Amcham), said there is opportunity to market the two areas as a single region. Amcham is a member of the JFC and Forbes is the principal author of Arangkada Philippines, the advocacy paper of JFC.

“We need a vision of a unified Clark-Subic complex. It might be anchored by an aerotropolis at Clark, but there also is a nearby deep water port” in Subic, said Forbes.

Aerotropolis is an urban plan in which the layout, infrastructure, and economy is centered around an airport, existing as an airport city.

Most of Forbes’ pronouncements at the Clark conference were the same as those that came out in last week’s Arangkada’s second anniversary assessment.

On the subject of infrastructure, Arangkada noted the “Philippines depends on air and sea transport more than continental countries. Since affordable airfares have stimulated domestic tourism, Filipinos are flying more than ever. New terminals and modern equipment are needed, as are more direct international flights to secondary cities. The absence of a modern international gateway airport restricts tourism, trade, and investment—in short, a major turnoff for international visitors. Clark and Subic have great potential for passenger and cargo operations.”

For Clark International Airport (CIA), Arangkada said the facility needs a second parallel runway, a terminal with a 20-million passenger capacity, and a high-speed rail from Manila to Clark, all toward eventually making Clark the country’s primary international gateway connected with a high-speed rail line.

The paper noted, “Frequent change of leadership at DOTC (Department of Transportation and Communications) has put the dual gateway airport concept in the twilight zone. Connector roads to link SLEX (South Luzon Expressway) to the North Luzon Expressway (NLEX) have been approved, but their relevance to Clark is no longer emphasized as there is no green light to make Clark a twin airport with the NAIA. The proposal of Ramon Ang (chairman of San Miguel) to build a new airport for Philippine Airlines near NCR (National Capital Region) is another stumbling block in the decision of government to transform Clark as an alternate gateway to Manila and Luzon. A NCR/Central Luzon Transportation Master Plan has not been released.

“The importance of Clark as a twin airport to NAIA for the Greater Capital Region has not been decided. DOTC insists it will soon make a decision and has allocated PhP100 million for a study to see how this can be done. In the meantime, the Clark International Airport Corporation (CIAC) is struggling to accommodate its ever increasing growth in passenger traffic, which passed the million mark in October 2012.

“CIAC plans to construct a budget terminal good for 15 million passengers regardless of whether Clark will become a premier gateway or not. Based on airline fleet planning for Clark, and fast growth of domestic and international air travel, by 2018 Clark passenger traffic could hit 16 million.”

The paper added, “The dual airport concept as proposed by JICA (Japan International Cooperation Agency) needs to become a twin airport concept. If Clark becomes just a pure international airport and NAIA pure domestic, the government will create a burdensome “third” travel sector, the NLEX (North Luzon Expressway) segment, which will create serious accessibility problems between the two airports. It will also produce an uneven playing field for foreign carriers as they will not have “connectivity” to domestic points. A fast rail connection should be timed when Clark will reach a passenger throughput of at least 20 million passengers. Sooner will require government to subsidize operations of the rail system. Runway capacity at Clark should be sufficient for the medium term,” Arangkada said.

The paper also took government to task for not acting on the proposed review on the use of travel tax as a source of revenue, and on reducing time and money caused by bureaucratic immigration policies and procedures.

It recommended that Asian low-cost carriers be allowed to compete in the domestic market. “This may require amendment of the Public Service part of the Constitution or the Public Services Act, which restricts foreign ownership of domestic carriers to 40%. However, the ASEAN Economic Community may in the future lead to cross border mergers of airlines in the ASEAN region.”

In addition, Arangkada said same take-off and landing fees for international and domestic airlines should be charged. “International convention is for weight to be the main determinant for landing and parking fees. For Philippine airports to remain competitive with other international airports, they should use the same formula as other airports.”

But there is acknowledgement that some progress has been made on the removal of discriminatory tax burdens such as the common carriers’ tax and Gross Philippine billings tax. “The bill removing CCT and GPBT has been passed by Congress and is awaiting the President’s signature for enactment. The measure, which is in support of the tourism industry, will boost the national economy by generating investments, foreign exchange receipts, and employment in the country. The new law removing these taxes of international passenger revenue and fares should be in place in early 2013,” Arangkada said.


Subic recommendations

Meanwhile, the paper recommended that international container shipments be gradually shifted from congested Manila to Batangas and Subic, both of which host underutilized ports.

“Private sector representatives strongly advocate shifting container traffic from the Manila port to the outer ports of Subic and Batangas. However, the national government through the Philippine Ports Authority (PPA) and DOTC have not acted upon this request. Some progress made with feeder operators serving Batangas as well as Subic and other shipping lines are considering calls as soon as volumes increase. Shifts to Batangas and Subic will follow if the industrial zones of Clark and southern areas of Manila are master planned to attract investment in industry and manufacturing. There is a misconception that business always follows infrastructure. Instead, transport follows business as seen by the massive Chinese hub ports like Shenzen. At present, there is still resistance from customers to pay added tucking costs to Batangas and Subic.”

One Response to “Clark-Subic as a single region pushed”

  1. Mervin Mercado March 4, 2013

    It is not only the trucking expenses the these businessmen are avoiding there in Subic Bay ports. Try to look at the bureaucratic processing of port authority gate pass there.


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