Subic Bay's new economic base Philippines: Four years after the U.S. Navy's departure, fresh investment and shrewd marketing give this port a new lease on life.

Sun Journal


SUBIC BAY FREEPORT, Philippines -- When the U.S. Navy steamed away four years ago from this port, Roberto Magno fretted he might never find skilled work again. He went from being a mechanic in a Navy machine shop to sitting home for months, collecting severance pay from the U.S. government. Eventually, he sold fish to make ends meet.

Magno is now back at work in the same machine shop where he once repaired engines for the U.S. military. As an employee of a new British-Filipino venture, Magno helps build 2-ton, British-designed armored personnel carriers for the Philippine army.

Many people feared that the Philippines would slowly collapse, because the government refused in 1991 to renew leases on U.S. bases. The Pentagon accounted for 15 percent of the country's economy, in rent for the bases and salaries for 42,000 workers.

But the people of Subic Bay have created a model of military conversion. It is being closely watched by Okinawa, where U.S. troops remain billeted despite Japanese opposition, and by military towns in the United States where bases have shut down.

The Subic Bay that President Clinton will visit next week -- for a summit of the Asian Pacific Economic Cooperation forum -- is a very different place from the infamous "sin city" that beckoned to GIs. It had tranquil beaches, a wild strip of girlie bars and whorehouses, and warehouses for a vast military arsenal.

The people of Subic have used their port, their U.S.-built airport and a renewed sense of public spirit to create a tax-free haven for foreign manufacturers. There are property investors and tourists. Suddenly, Subic is a city of free enterprise.

"It's very different from working for the Americans," Magno says, watching some of his 65 colleagues -- many of them former Navy colleagues -- install steel plating and engines into the armored personnel carriers. "Now I have to work for a quota. Before, we spent whatever money the U.S. Navy put in our budget."

All over Subic, the signs of change are palpable. Federal Express uses Subic as its hub for Pacific overnight deliveries. Acer, the Taiwanese electronics giant, employs about 600 workers building PC motherboards and is building a PC plant that will employ 3,000. Thompson, the French electronics giant, uses the facility to build telephones.

Malaysians have opened a deluxe hotel and casino; a Japanese consortium is opening an industrial park for electronics firms; Calvin Cox, a businessman from Baltimore, uses Filipino clerks to input medical textbook manuscripts into computers.

About $1.6 billion has been invested in the past five years, primarily from American, Taiwanese and European firms.

"All this place had was San Miguel beer and coconuts," Cox says. "But the people here were willing to knock down doors to get my business."

Like many others, Cox credits Subic's rejuvenation to Richard Gordon, the exuberant, almost evangelical leader of the new Subic Bay Metropolitan Authority and former mayor of Olongapo, the base's neighbor.

"The only real challenge was convincing the country that it could transform itself," Gordon says. "The lesson of our transformation is that you must look to your own citizens and your community, not to some big government, to make the change. Nobody will do it for you."

Gordon's salesmanship persuaded thousands of citizens to volunteer as security guards and maintenance personnel to keep the base from being looted when the Americans pulled out.

"We were upfront to the volunteers and said there's no money in it for you now," he said. "We just asked them to work without pay in the hopes that their grandkids would have jobs forever."

While desperate Filipinos stole everything from cars to doorknobs when the U.S. Air Force abandoned Clark Air Base in nearby Angeles City, Gordon's security patrols kept Subic virtually intact.

Volunteers kept the power plants running and the water system working. Gordon then persuaded then-President Corazon C. Aquino to turn the base into a free port, where foreign firms would get tax advantages and avoid customs hassles. He then wooed Federal Express to set up its hub here by improving the radar and runways.

"Then the World Bank came, and they lent us money because they could see we had a plan and a vision," Gordon says.

Keeping the base intact also gave investors the confidence that they could build long-term projects, Gordon said.

Some are here to take advantage of the low-paid, English-speaking workers. "If I had to translate everything into Thai, say, it would make my life impossible," says an executive who asked not to be identified.

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