Funny that I just mentioned Subic again recently here at the PhilFAQS guide to Philippine Living. I had no idea this news was going to break only a few days later. As most people know, whatever one thinks of Donald trump as a person there is no doubt he knows how to build golf courses, hotels and casinos and make them pay.
“The Donald” also is well known for building first class ventures, he leaves the MicroTels, Motel Six’s and other low-dollar ventures for others to deal with. The various Trump Towers and other projects are in some cases even literally gold plated.
To anyone who follows the saga of the former US Navy base at Subic, it’s no secret that there is still plenty of business room for truly first-class facilities. there is also a pot load of Korean money already invested there and a number of cash-heavy Korean companies looking for the right opportunity to grab more of the trade of well-to-do Americans, Koreans and Japanese who are big vacation and leisure spenders but are hardly catered to at all in today’s Philippine travel industry.
So Mr. Trump is going to spend as much as a billion US on a huge complex at Subic. He smells opportunity in the Philippines as I do.
Now why would he pick Subic out of all the many other top quality locations he could choose? A few factors I imagine had something to do with the decision:
- Taxes. Unlike almost any city in the Philippines taxes for business on Subic are very, very low and very simple. A business pays only one bill to the SBMA and doesn’t have to deal with dozens of other taxing entities.
- Visas: Since Subic is one of a number of Special Economic Zones employees of foreign investment companies can get permanent residency visas easily and be able to come and go in business without hassles and petty officials.
- Utilities: Subic has it’s own power production, water utility and sewer treatment facilities, all built and maintained to US standards
- Airport: Subic has its own international airport on site. Tours can land and be transported direct to hotels without dodging a single smoke-belching Jeepney.
- Harbor: Subic Bay is ne of the best natural harbors in the world. There are already facilities to handle cruise-ship size tourist loads, a developed yacht club and extensive cargo facilities and shipyards.
- Roads: The Philippine government just cut the ribbon this year on a world-class express toll way that runs with no traffic lights or tricycle slowdowns all the way to Manila. There is no other road like this in the Philippines and it is made specifically to connect the business center of Manila to Subic.
So all in all, I’d say Don trump is making a good decision. What do you think? here’s the full article:
Trump, 2 partners to invest over $1B in Subic
Three international real estate firms, including the Trump Organization of real estate mogul Donald Trump, announced yesterday they will invest more than $1 billion in the country for the development of a high-end leisure facility in Subic.
The Trump Organization, which is the primary company of Trump, oversees nearly all of the business development interests of the real estate mogul- such as real estate, hotels, golf clubs, etc. (but excluding the casinos).
The Trump Organization signed a memorandum of agreement with two of its partners, Korean firm Heung-A Property Group (HAPG) and Westgate Resorts Asia Ltd., for the construction of an integrated leisure, sports and entertainment facility.
“Our initial foray in the Subic Freeport zone signals the extreme confidence of various highly funded multinationals with respect to both the near and long- term economic and investment prospects in the Philippines,” Seung Guk Yang, chairman of Subic Neocove Corp. said.
Neocove is a wholly owned subsidiary of HAPG, formed to oversee and manage the project while the Trump Organization will be the lead and master developer of the Subic project.
The billion dollar investment will be built in 457 hectare beachfront facility in Subic. The master plan includes several hotels, residential villas, retail shops, casinos, educational and medical facilities, a convention center, a water park and a spa anchored on a 54-hole golf course.
The entire project will be done in three stages.
The first stage is expected to start in the first quarter of 2009. First to be constructed are the golf course and infrastructure projects like roads. Neocove said they will be spending $250 million for this and will be completed by 2011.
Also expected to be competed first are the basic accommodations like the hotels, the school and the convention center.
The second phase will cost $500 million.
The whole project will take 10 years to complete.
Youn Jae Lee, chairman of HAPG said the slowdown in the world economy will have no impact on their plan because not only are they adequately capitalized, their target market are high end clients.
The target, he said, are long staying and community tenants mostly coming from the US and Korea.
“We hope to maximize the long-term opportunities provided by the various growth areas in this region tapping the future growth of lifestyle, health and real estate investment spending,” Lee added.
PhilFAQS.com, once again bringing news about living in the Philippines as it happens.
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Hi Dave ~ Can’t suggest I am thrilled with this, mainly because I really don’t like Trump or the sight of him. Still if his name is behind it then it will likely be a huge boost to the local economy. My guess is that when this is complete living in Subic will be as costly as it is in Hawaii.
@Mike McMahon: Hi Mike … I share some of your thoughts but over all I think this is aheck of a lot better news than things like drilling for oil imn Palawan, for sure.
As far as driving up proces, yes I don’t doubt it will … but even if Trump dropped out tomorrow there is alot, a lot of Korean money looking for a ‘home’ there, and at least if Trump builds it there will be signs in English
.
No doubt at all, though, it will be a mixed blessing.
Trump has lost his sense of smell, what he is smelling there in Subic is “Shit River”. I had to throw that foul joke in there.
I would much rather see the RP do that type of large scale project, not rely on another Foreign investor. I know a couple of retired Jarheads there in Subic and they say as it is now the Koreans seem to run the place, at least the SBMA area.
Hi Dave, another Hawaii?
Will be expensive to live there when it happens. Will there be a casino as well?
It doesn’t take much to invest here to get a resident visa. Compare this to US: I just got news from my friend in Florida that one can invest US$1 million in “government approved” projects to speed up the greencard issuance. Orlando just got approved. One apparently can invest it in 2 units of condo/hotel and then you are allowed to work, or start your own interests in USA. Only 35 foreign investments are allowed. I don’t know much about this – think it is fairly new.
I heard that there is a fair number of koreans here too
. In fact, they are starting a condo project in Davao as well.
@Neal in RI: It’s really funny to me, Neal, how often I hear that observation. The Koreans are taking over. In a business sense it certainly has some validity in the Subic/Olongapo area … you see Korean signs on everything. Almost every expat I have ever met here who _has_ worked in the Philippines has been employed in a Korean-English school …and of course the Korean-English schols we see here are only the tip of the iceberg, because the majority of that business is, naturally enough, in Korea … only the low priced contingent comes here.
I’m really a bit mystified as to how any race or ehtnicity ‘takes over’ an area. It most certainly happens, but _how_ it happens I don’t fully comprehend. I can say this, though, I could count on one hand the foreigners I have every met here who have started a business, made an investment or worked 12 or 14 hours a day in something entrepreneurial. I’ve also never met a Korean businessman here.
If I did have a community of Korean freinds, would most of them be in that investment category? Likley. But why, I don’t really know.
I do know that even though I may not be Donald trump’s best buddy, I’m happy at this news becuase it is for sure that we Americans _can_ be as entrepreneurial and work just as hard as anyone, it just seems to me that for years we have not.
@Ellen: Absolutely a casino is scheduled. But then again there are already several in Subic … PAGCOR is everywhere it seems at times. Will it become more exspensive? Obviously in some ways … but many miss the fact that Subioc will already grow by leaps and bounds due to the Hanjin (Korean-based company) shipyards. Shipbuilding is close to dead in many countries but it’s thrivinghere, they had to open another yard recently to cope with the orders. In the long run, actually producing goods versus ‘service’ jobs is what bu7ilds a country’s strength. Since I was aboy i have watched my beleoved US drop from the producer of the world t the consumer of the world, while everyone runs around trying to make money by selling paper.
A thought that seems to escape many … you have to actually produce something, somewhere, in order to make abase for all the ‘service’ and ‘investment’ industries have a foundation.
I was under the impression that only PAGCOR casinos were legal in this country. Am I wrong on that, or is Trump going into some kind of partnership with PAGCOR? Certainly he cannot have outright ownership of whatever it is he is doing up there.
@Mindanao Bob: Not sure Bob, although I beleive PAGCOR doesn’t build the existing Casinos … certainly not all of them … they manage and oversea, but there’s a brand new casiono on the water at Subic now that’s directly across the street from an older competitor. I was told that new one was bult by some of the same investors as built the new (second) Hanjin shipyard.
The beauty of the special economic zones is, foreigners cna have full control of their invetsments … the laws on corporations (60% Filipino, etc.) do not apply in the SEZ’s. The land always belongs to the governement of the Philippines, in it’sentirty, but a foreign investor can come in and set up a copnay completely foreign-owned, get permanent residency for whomever they wish to certify, etc. They are ‘special’ in more than a name. And there’s only one permitting agency, one tax authority, one profit-percentage-based tax, one police department … who works for the port authority, not for a mayor or a provincial governor, … and many other foreigner advanatges not available anywhere else.
Can’t remember the name now, but there’s a Special economic Zone set up at one of the Mindanao ports already, I believe, but since there was no US base there in the past, there’s not the same class of infrastructure in place. Anyway, the casino was just one thing mentioned in the article so how exactly that will be set up/run is probably not even fully decidided yet.
any word if this indeed did push thru?
Don’t know anything else as of yet, Brix. I wasat Subuc a few weeks ago, the numbe rof hotel and condo building projects are astouding … a guy would have to live there and make afull-timne job out of keeping them all straight I think. I laugh when I pass through every time about the \world-wide’ economic crisis’ and the typical Amerocan dismissive comment about the Philippine’s “third-world” status. Someone forgot to tell these folks.
Nit saying that hard times can’t come in the future, but I see nothing on the visible horizon. One rerason Subic is such a hotbed of activity, I thinbj, is that it’s prime land, available at what amounts to very reaonable prices, there’s only one offrice to deal with … no making the rounds of dozens of government agencies, foreigners can own businesses, and decent American-built, American-style housing is available on excellent terms.