(First of two parts)
CLARK FREEPORT--Precy Aguilar cannot say how many more years, or even months, the Peninsula Fashion International Corp., Clark's eighth biggest exporter, can stay afloat.

That uncertainty has been upsetting the Filipino manager since the American economy took a turn for the worse last September, resulting in the fall of major financial firms there.

With orders from the United States steadily being reduced, while sales prospects during the holidays becoming more slim, the Chinese-owned garments firm is producing only half of its regular output of 500,000 pieces this month. It also trimmed its workforce from over 1,000 to 600.

Sewing machines still whirr in its factory, churning out hundreds of embroidered and knitted shirts by the hour.

Aguilar prays that, however bleak the situation is, it would not slide any further, given the tough competition with Vietnam and Cambodia, allowing workers to keep their jobs.

"We cannot project kung hanggang kailan kami (up to when we will operate)," she says. "We are just trying to balance everything to continue our operations."

At the Subic Bay Freeport, about 80 kilometers south of Clark, the garments sector has also felt the heat.

Worries
Limech, a garments firm, retrenched 541 workers and closed its newest factory in September, preferring to consolidate all its production in its plant at the Bataan Economic Zone in Mariveles town.

The financial crisis, which led to a tightening in credit, delayed the development of a $200-million golf course project by a Korean company at the free port, says Subic Bay Metropolitan Authority Administrator Armand Arreza.

This happened as the investment firm Lehman Brothers, from whom the Korean firm was packaging a loan, went bankrupt.

The golf course project has not been scrapped yet but the developer is aware it would take time to get it off the ground as borrowing costs for loans have since gone up, says Arreza.

Mark Pressley, general manager of Smart Shirts in Clark, is using the Thanksgiving and Christmas sales in the United States to gauge how the company's shirts will fare in the market.

"My worry is, should sales fall off with these two festivals, maybe there'll be inventory in the US and next year, we may have a slowdown," says Pressley.

Smart Shirts, the fourth biggest exporter in Clark, is enjoying a 10- to 15-percent increase in production compared to last year's two quarters, and Pressley hopes to maintain this rate up to yearend.

"I'm planning to be a little tighter next year," he says.

That means slightly less production next year in anticipation of the crunch. At least 95 percent of its shirts are sold in the United States and the rest in Europe.

"I'm very hopeful for the future, but if the economy does dip too far, who knows?" Pressley says.

Demand falls
Executives of the Yokohama Tire Philippines think that the company is safe, at least for now.

"Fortunately, we have enough orders from customers," says Hikomitsu Noji, Yokohama president.

By his estimate, the actual pinch will be felt a few months later once demand falls.

Clark's second biggest exporter makes 20,000 tires, or a third of the actual demand, in its plant daily. At least 4 percent goes to the local market, 36 percent to Europe, 30.7 percent to the US, and the rest to other Asian markets.

One of Yokohama's biggest buyers, US automaker Chrysler, has announced it would cut 5,000 jobs by yearend, reports say.

But Noji says no mass layoffs are forthcoming for Yokohama's 2,000 Filipino workers.

"I don't think so. No," he says, referring to a cut in the workforce. "We need to make more tires, customers [are] still waiting. Economies [may be going down] a bit ... but they still need tires for an increasing number of cars."

Rashedul Chowdury, vice president for operations of the Subic-based D-J Aerospace, says the effects of the financial crisis may pop up later next year.

The company, which makes structural components for aircraft, is now busy filling orders for Boeing 787 planes.

"In our industry, we're not feeling [the crunch] yet because of the nature of the business," Chowdury says. "Airline companies place orders two to three years ahead. But we expect to feel it at the end of next year."

Guesswork
As to the economic crisis, Chowdury says, "we are only guessing."

"Nobody really knows what is going to happen," he says.

Should things get worse, he says companies will still be "working harder, yet earning less."

At the Subic Bay Gateway Park, the 135 Taiwanese, Japanese and Middle Eastern locators feel they are still relatively stable at this point, says Jeff Lin, president of the Subic Bay Development and Management Corp.

The companies make electrical and mechanical products for overseas markets, mainly the United States.

Many investors are concerned though, with Lin adding that in informal talks, they discuss the world's financial situation.

"I think there would be some certain degree of impact," he says. "This is not a very rare situation. It is happening globally."

The Korean shipbuilder Hanjin Heavy Industries and Construction Philippines Inc. is not hurting yet.

Its orders have been booked up to 2013 and, so far, no cancellation has been made for any of the eight vessels being made at Subic's Redondo yard, according to a report from Jeong Sup Shim, HHIC president.

The tourism sector in Subic sees a bright lining, though.

"When times are hard, people want to be entertained," says Yvette Ocampo, president of Jungle Joe's World, a theme park that opened in January.

Although the globe is bound for what analysts call a recession, Ocampo is not modifying plans for the park.

What is certain, she says, is that the development of the 60-hectare park may take longer, at least two years or more.

More than 30 tourism-based companies are consolidating their promotion to make Subic a choice destination among local and international visitors, hard times or not. (To be concluded)