Thousands of people who had traditionally relied on the Subic naval base found themselves jobless, while nightclubs that provided bawdy entertainment to American troops fell silent when the Senate ended the facility’s lease contract.
"It was devastating and confusing. Nobody thought the US government would allow its base to close. There were no immediate offers for people like me, and my kids were going to college then," recalls Nick Leonzon, who had worked for the Americans as a public works executive at the base.
While there were talks on how to develop the abandoned Subic base, none at that time had a concrete plan to transform the 67,000-hectare facility into a money-making venture.
Former President Fidel Ramos, however, declared the shuttered base a freeport where passing goods enjoyed lower tariffs and investors relocating to the enclave were given additional perks.
The government also scored a marketing coup when world leaders converged for the annual Asia Pacific Economic Cooperation (APEC) summit in 1996, with multinational firms scrambling to set up shop here.
Exports generated mainly by Japanese and Taiwanese electronics factories in Subic have averaged about $1 billion in the past four years, while investments grew 51 percent over the year to P2.5 billion ($47.17 million) in 2002.
And as ports in Hong Kong and Singapore are slowly going over capacity, plans are afoot to expand Subic’s deepwater port capable of accommodating the largest cargo and passenger vessels.
Leonzon, now Subic’s deputy port administrator, says the nine-year plan includes reclamation of about 30 hectares of land to expand the existing port, the first phase of which would likely be operational within the next two years.
"We are now in the process of awarding the first phase of the port development project," Leonzon told AFP in his bayside office recently.
Outside, a huge US naval catamaran from Japan unloaded military equipment, vehicles and supplies for US marines in joint military exercises with local troops in the north, while a crane delivered precious cargo on to the port.
Once completed in 2012, the port would able to accommodate 900,000 TEU (twenty-foot equivalent unit) containers every year, about half Hong Kong’s capacity of 1.8 million TEUs and very much below Singapore’s 2.2 million TEUs, Leonzon said, citing his office’s own studies.
Leonzon said he hopes that container ships avoiding the former British enclave and the tiny Southeast Asian city-state because of the outbreak of the Severe Acute Respiratory Syndrome (SARS) would look at Subic as an alternative cost-effective site.
He points out that berthing fees are much cheaper and cargo could easily be brought to other countries en route Manila or aboard commercial planes that fly out of the nearby Subic International Airport regularly to South Korea, Hong Kong and Taiwan.
The SARS outbreak "could be an advantage to a certain extent," with the Philippines reporting fewer SARS cases than Singapore and Hong Kong, among the hardest hit by the disease in Asia.
"Furthermore, everybody who knows Subic port knows that it’s one of the best developed by the US navy," said Leonzon. "This development project then would help equalize the playing field for us."
Filipino tourists as well as those from around Asia, meanwhile, have been flocking here in droves not only for duty-free shopping, but also for weekend vacations and outings in various beaches in Subic.
Extreme water sports, like kayaking, scuba diving and parasailing, as well as jungle survival lessons taught by native Aeta tribesmen that had served under US troops, are top draws. A show that features false killer whales doing stunts with their trainers is also popular.
Data from the Subic Bay Development Authority showed eight million local and foreign tourists visited the freeport in 2002, about 15 percent more than the previous year.
But the expansion work never seems to cease — with workers hammering away even at night to finish yet another hotel.
"As they say, after the rain, there is always the colorful rainbow. We just can’t discount the possibility that there will always be a better chance for development in Subic," Leonzon said.