SUBIC BAY FREEPORT, Philippines ? US delivery giant Federal Express (FedEx) closed its Asian hub in this northwestern free port Friday, with the last flight leaving for Taiwan just before dawn.

FedEx announced two years ago that it would relocate its Asian hub from Subic Bay Freeport, a former US naval base, to Guangzhou in southern China.

"Last night was the last night of full operations," said Subic Bay Metropolitan Authority (SBMA) administrator Armand Arreza.

"The market in China is bigger than the entire market of Southeast Asia. China also gave FedEx rights to handle its domestic cargo, which is huge," Arreza said.

?We?ve been hearing reports in the media that they are leaving ? but the truth is, they won?t be able to do that in one day,? he said.

Arreza said FedEx would take a few months to pull out. ?It may take them until May to completely move their operations to China,? he said.

?They are one of the best companies here,? the free port administrator said. ?They have already taken care of their employees, especially those who will lose their jobs. They?ve given out separation pay and benefits.?

Arreza said he was hopeful that FedEx would return to Subic.

?It?s still possible for them to come back ? They are still testing the facilities in Guangzhou. If something goes wrong, or if they find that the capacity of their facility there is inadequate, then they can still use Subic as a base of operations,? he said.

Subic has been the hub of FedEx?s Asia-Pacific operations since 1995, making it one of the pioneer locators here. After the closure of the US naval base in 1992, FedEx became one of the biggest investors in this free port.

According to its company profile, FedEx provides services for more than 2.9 million items to 212 countries daily. It employs about 137,000 people, has nearly 42,500 drop-off locations, and operates more than 590 planes and 38,500 vehicles in its integrated global network.

The FedEx hub earned the SBMA about P150 million ($3.2 million) from landing fees and warehousing in 2008.

Company employees, speaking on condition of anonymity, said about 500 workers would lose their jobs. At the peak of its operations in 2004, the FedEx unit in Subic employed about 800 people.

At the time it was hoped that the FedEx move would lure foreign businesses to Subic and breathe new life into the area after the US closed its military bases in the Philippines. With a report from Robert Gonzaga, Inquirer Central Luzon; with editing by INQUIRER.net