Clark’s duty free shops on ‘death throes’

CLARK FIELD, Pampanga — The remaining 14 duty free shops here continue to struggle for survival, offering as much as 50 percent discount and pegging the value of the US dollar to as low as P39.

However, an official of the Clark Development Corp. (CDC) said the stores are on their "death throes."

"The shops have asked the CDC to restructure their rental arrears amid heavy losses," said Noni Laluces, manager of the enterprise and operations monitoring department of the CDC.

Laluces said that imports of duty free shops here have declined by as much as 60 percent since 2002 when the government lifted their exemption from excise taxes. "Because of this, they no longer import liquor and cigarettes," she noted.

While hope for survival is dim now that there is a pending legislation in Congress that would lift all tax privileges of Clark duty free shops, the owners of are still trying to petition for the retention of some tariff incentives.

"After all, the shops had established Clark as a shopping landmark during their boom years in 1997 and 1998," Laluces said.

In July last year, the Supreme Court ruled that Clark and other former US military sites transformed into economic zones were not exempted from tax exemption privileges, except Subic.

In reaction to the SC ruling, the Lower House passed twin legislations confirming the tax privileges and granting tax amnesty to the economic zones to spare them from paying back taxes. The Senate has yet to pass its counterpart legislation.

But Laluces noted that duty free shops were not included among the beneficiaries of the legislation, except on the tax amnesty provision. She noted that the pending legislations would apply only to export-oriented and aviation-related companies.

In 1997, a total of 22 duty free shops were set up in Clark and attracted thousands of customers, especially during weekends, at some point even causing traffic congestion along Clark’s main thoroughfares.

Now only 14 of the shops have remained, including Arjan, Balikbayan, Clark Interior, Cold Water, Conrad & Co., Food and Beverages, Gilroy, MCIDC, Oriental, Parkson, Puregold, San Diego, and Value City.

With the opening of new shopping malls in nearby Angeles City and Mabalacat in the last three years, patronage of the remaining duty free shops further declined.