(Last of a series)
SUBIC BAY FREEPORT—Locators and residents in this free port are up in arms over a new revenue-generating measure being imposed by the Subic Bay Metropolitan Authority to pay its loans.
In a June 6 letter to the SBMA, Subic Bay Freeport Chamber of Commerce (SBFCC) officials protested the imposition of the common use service area (Cusa) fee, saying it would burden locators and residents.
“SBFCC acknowledges the enormity of SBMA’s financial problem and we appreciate its call for support, civic mindedness and cooperation from locators and residents. SBFCC believes, however, that the implementation of the Cusa is contrary to the spirit and intent of Republic Act 7227, as it places undue burden on locators and residents, and will create harmful effects on the free port,” it said.
Under the Cusa scheme, SBMA will charge the municipal services it provides to locators and residents. These services will cost SBMA P388 million this year, up from P354 million last year.
But SBFCC said the provision of municipal services by the national and local governments and state agencies “is generally paid for from taxes.”
“The Cusa is attempting to charge fees that are already being paid for by locators and residents through mandated taxes,” it said.
Under the scheme, SBMA will charge locators P4.50 to P9.50 per square meter for services. The rate depends on whether locators are in Binictican, Kalayaan Heights, the central business district, Ilanin Forest (East and West), Cubi-Triboa, Subic Port or Subic Gateway.
Residents, on the other hand, will pay P1,200 per housing unit.
SBMA said the Cusa fee would be included in the rental bill of locators and residents.
“The Cusa will be imposed only on SBMA’s direct lessees who will have full and primary responsibility for payment. SBMA’s direct lessees have the option of passing on the Cusa to their sub-lessees. The Cusa will be based on land area, not floor area,” it said.
SBMA said the Cusa scheme carried stiff fines for those who would refuse to or could not pay, the most severe of which is the cancelation of the certification of registration and tax exemption (CRTE) or of the residential lease agreement.
The reasons for the Cusa’s imposition were outlined in briefing papers given to locators and residents during a public hearing held by the SBMA.
Very high rates
However, SBFCC said the legal basis cited by the SBMA for implementing the Cusa was “over reaching.” It said the Cusa fee could wipe out investments and spell the downfall of many locators because the rates are “outrageously high and defeat the principle of the [free port’s] creation.”
“While a few members of the SBFCC are keen on helping SBMA resolve its financial problems, they find the Cusa rates very high. SBMA is looking at P354.76 million in revenue from the Cusa imposition. Considering that its income from leases in 2010 and 2011 averaged P774.97 million, the lease costs will effectively increase by 45.8 percent on the average. This is beyond reasonable,” SBFCC said.
SBMA Chair Roberto Garcia, however, said the imposition of Cusa was nothing new, noting that other locators charge the fee.
“The Cusa should have been implemented a long time ago … at the very start of SBMA. The business model (of the SBMA) was wrong. Who is going to pay for the security, street lighting and road maintenance, considering that we don’t have a share (in the 5 percent tax collected form locators)?” he said.
“If you want to continue to enjoy the benefits of the free port, you should pay,” he said.
Unfair way
Timothy Desmond, president of the marine park Ocean Adventure, said his firm was opposing the imposition of any user fee based on the size of the leased property “because of the unfair way it charges for service provided.”
“Ocean Adventure would be charged almost 10 percent of all of these costs for the entire base. The fee would constitute almost a 400-percent increase in our base rent. It would put us out of business,” he said.
“Any fee for service must be based upon the actual costs of the service. The SBMA bureaucracy is bloated and inefficient. We feel the costs presented as the bases for the fee were hugely overstated or reflected massive inefficiencies,” he said.
Garcia said the Cusa fee would be based on land area to ensure the development of the free port. “I don’t want to have people holding on to large tracts of land that they are not developing. If you don’t want to develop, then you pay. It discourages speculation.”
SBFCC said reducing the “bloated bureaucracy” of SBMA would reduce “its extremely high operating expenses.” It also scored the “issuance” of housing units to SBMA personnel which, it said, “should be put on hold and thoroughly studied.”
“The LED (Law Enforcement Department) should be studied with the intent of having a policing program that is proactive and professional. Street cleaning and grass cutting services should be privatized to be more efficient. Other SBMA services should also be reviewed,” it said.
To improve its finances, the SBMA should ask the government for a percentage share in the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR) collections from the free port, SBFCC said.
Fresh valuation
“Since depreciation is a huge part of SBMA’s expenses, it may be worth it to perform a fresh valuation of the assets left by the US Navy and simply write off those that are barely or can no longer be leased,” it added.
Garcia, however, insisted on the need to raise funds to pay SBMA’s loans and improve the services in the free port. “There’s no backing down on this … It’s a must. We cannot improve our service, we cannot buy vehicles, do road maintenance or solve the flooding [if we don’t impose the Cusa fee],” he said.
“There are many who complain but are not willing to help. There is no other way,” he added.
In response to demands of locators for an audit of SBMA’s finances, Garcia said: “Why will the SBMA agree to an audit by its locators?”
“With due respect, the SBMA is the authority here. If you want to live and operate here, you have to pay. If we make so much money, we could provide those services for free. But in this time of need, we need to help each other out. There should be no exceptions,” he said.
“I will try everything in my power to keep them here. But in the end, if they cannot keep up with my program, maybe they don’t have a place here in SBMA. I feel that my plan is reasonable, and it will move SBMA forward,” he said.