It’s now Clark Freeport

CLARK FIELD, Pampanga – By this afternoon, this former US air force base, abandoned by the Americans in 1991 and converted into a special economic zone in 1993, will officially be declared as Clark Freeport Philippines.

President Arroyo is expected to sign at noon today Senate Bill 2260, declaring Clark a "freeport" where investors will be entitled to the same tax and other duty- free privileges enjoyed by their counterparts at the Subic Freeport.

At a program slated at the parade grounds of the Clark Development Corp. (CDC) complex here, the President will also sign Senate Bill 2259, which grants a one-time amnesty to Clark investors for back taxes.

The twin bills will also benefit Camp John Hay, Poro Point and the Bataan Technological Park.

The bills were pushed in Congress after the Supreme Court, in its decision on July 29, 2005, declared that Clark as well as other former US military facilities in the country are not entitled to tax and duty free privileges enjoyed at Subic and that, consequently, investors in these areas were mandated to pay back taxes.

The high court noted that only congressional legislation, and not Executive Order No. 62 issued in February 1993, could grant tax privileges even as it pointed out that only Subic Freeport investors were entitled to such privileges as explicitly stated in Republic Act 7227, or the Bases Conversion Law.

CDC president and chief executive officer Liberato Laus said once Senate Bill 2260 is signed into law by the President, Clark will officially be called Clark Freeport Philippines.

A provision of the legislation states that: "No national and local taxes will be imposed on registered business enterprises within Clark. In lieu of said taxes, a five-percent tax on Gross Income Earned (GIE) will be paid by all registered business enterprises within the freeport and will be directly remitted as follows: three percent to the national government, and two percent to the treasurer’s office of the municipality or city where they are located."

Under this new law, the CDC will remain as administrator of the 4,500-hectare Clark freeport with the Clark International Airport Corp. (CIAC) which runs the Diosdado Macapagal International Airport (DMIA) as its subsidiary.

It also said that "business enterprises presently registered and granted tax and duty incentives by the Clark Development Corp., Poro Point Management Corporation, John Hay Management Corp., and Bataan Technological Park Incorporated, including such governing bodies, will also be entitled to the same incentives until the expiration of their contracts entered into prior to the effectivity of the Act."

Since the CDC was created in 1993 to administer Clark, some 389 foreign and domestic investors have moved into the zone, pumping in some P24.33 billion worth of investments. Last year alone, investors here exported various items worth $1 billion.

Over 47,000 people, mostly from Pampanga, Tarlac, and Bulacan, are now employed at Clark.  

Meanwhile, Clark Investors and Locators Association (CILA) and other business groups have urged the President to rescind Executive Order 500-A which, they said, "is contrary to the policy of the liberalization of Philippine skies embodied in EO 500."

Their resolution proposed that EO 500-A be repealed in favor of their proposed EO 500-B which, it said, would lay "the proper policy for the expansion of air services to the Diosdado Macapagal International Airport by facilitating access by air carriers to such airport."

EO 500-A provides that only officially designated carriers can enjoy more flight privileges at the DMIA. - with Ric Sapnu