POSTSCRIPT / April 14, 2005 / Thusday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Why there should not be another SM mall at Clark

SM AT CLARK: The SM Group of Henry Sy has been allowed to build a giant shopping mall (see POSTSCRIPT 17Aug2003) near the Balibago gate of Clark Field in Angeles City. It will be just 15 minutes away from the other SM center near the San Fernando exit of the North Luzon Expressway.

Many Pampango businessmen, some of them with the Pinoy Gumising Ka Movement led by Ruperto L. Cruz, have been protesting, but it seems key officials have succumbed already to Henry Sy’s persuasive power.

To give the opposition a fair chance at being heard, I am using today edited excerpts from their paper titled “SM-Clark: A Betrayal of Public Trust”:

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BETRAYAL: Rep. Act 7227 or the Bases Conversion Law of 1991 mandates the transformation of Clark into an aviation-led economic hub to spur the development of Pampanga and Central Luzon.

As a special economic zone, it is to be the locus of export-oriented, labor-intensive industries. As an aviation complex, its Diosdado Macapagal International Airport is envisioned to host the country’s premier international airport.

Sadly, the promise of Clark has remained unfulfilled. The Arroyo administration appears to be doing its utmost worst to have it stay unfulfilled.

SM-Clark does not answer the industrialization priorities of the special economic zone. It is not labor-intensive, as SM is notorious for employing contractuals only for three to five months so they do not become permanent employees enjoying all the job benefits, including security of tenure, to which they are entitled.

It is not export-oriented but import-driven, being a purely commercial enterprise.

If only for these reasons, SM’s bid to locate at Clark should have been disqualified right off. Or RA 7227 should have been amended.

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ANOMALIES CITED: The grant of locator status to SM-Clark was fraught with anomalies.

  1. Contrary to government procedures, there was no official bidding for the initial 11-hectare site. SM has been given also an option for additional land near the mall.
  2. The site itself — in the vicinity of the Balibago main gate — is within the aviation area. This violates land use and zoning regulations.
  3. Majority of the Clark Development Corp. board of directors signed their approval without public consultation or hearing with local businessmen, local officials and other stakeholders severely affected by the project.
  4. The Memorandum of Agreement was shrouded with a “confidentiality clause” that prevents its being publicized, in gross violation of rules governing government contracts. It also mocks the administration’s avowed policy of transparency.

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SHORT-CUTS: Attempts to rationalize the SM-Clark “anomaly” made a further mockery of the democratic process.

Mabalacat Mayor Marino Morales, then president of the Pampanga Mayors League, passed by his lonesome a league resolution endorsing SM-Clark. It was signed only much later by the members.

Then Pampanga Vice Gov. Juan Miguel Arroyo, the President’s son, railroaded the passage of a pro-SM-Clark resolution at the Sangguniang Panlalawigan without the benefit of public consultation or hearing.

There was an apparent conspiracy to expedite SM’s coming to Clark. Is there a corresponding conspiratorial payback once SM-Clark operates?

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PREFERRED STATUS: A “most-preferred status” was granted SM by the CDC board to the utter disadvantage of the government and the people.

The board gave Henry Sy his “main-gate-or-nothing” demand by agreeing to move the gate farther inside to give a semblance of the mall being outside the eco-zone while CDC retains land ownership and so SM-Clark can fully enjoy locator status and privileges.

A win-win situation, yes, but only for Henry Sy, and an abject loss to the government and people.

As a locator, SM-Clark enjoys such incentives as VAT exemption; tax- and duty-free importation of machinery, equipment, raw materials, supplies and other articles, including finished products; non-payment of sales and business taxes, amusement taxes, real property taxes, among other levies of local governments.

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NOT EQUITABLE: With all these privileges granted SM-Clark, an inequitable situation obtains in the market around Clark.

In 2003, the Angeles lost one multimillion-peso investment when Ayala Land Inc. backed out of a planned 8.7-hectare commercial center after a legal opinion of the Department of Justice sustained the CDC position of locating the SM-Clark mall at the Clark main gate.

If a giant like Ayala cannot compete with an SM-Clark laden with a VAT exemption and duty-free privileges, how much more the small entrepreneurs like grocery stores and supermarkets, local malls, even restaurants?

The painful experience of the local commerce in San Fernando with the coming of SM there is too recent to be forgotten. Many times more devastating to the local businesses because of its lopsided advantage, SM-Clark will be more severely felt.

* * *

UNEVEN FIELD: Moved by the strong opposition against SM-Clark by a multi-sectoral group of local businessmen, traders, students and militants expressed in a march-rally of 10,000 people at Clark’s main gate in 2003, Angeles City Mayor Carmelo Lazatin took the issue to President Arroyo herself.

The President’s response was to order then-CDC President Emmanuel Y. Angeles to “level the playing field.” How? She did not say.

Her bruited advocacy for small- and medium-scale enterprises as the engine of economic growth for the country is one stunning instance of hypocrisy given her dogged determination to see SM-Clark through.

One billionaire in Henry Sy, given all the perks and privileges of VAT exemption, duty-free importation, and non-payment of local taxes as against the thousands of small traders and medium entrepreneurs saddled with all sorts of local and national taxes and further burdened by looming VAT increases. That is President Arroyo’s idea of a level playing field?

If indeed President Arroyo desires a level playing field, then she can well declare by presidential fiat, or work through her Congress majority, the establishment of Angeles City, Porac and Mabalacat in Pampanga, Capas and Bamban in Tarlac (the areas contiguous to Clark) as special economic zones with the same privileges as Clark’s — VAT exemption, duty-free importation, non-payment of local and national taxes.

Or why not allow local businessmen to locate — in an area of their choice, say the southern side of Roxas highway opposite the SM site — and also enjoy all locator privileges? This is fairness and equity. This is leveling the playing field.

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CLARK OBSESSION: In 2004, the 12-hectare Bayanihan Park in front of the Balibago gate was practically ceded to Henry Sy with its redevelopment at a cost, to Sy, of P50 million into more-parking-lot-than-park to the SM-Clark mall.

It has been reported that CDC has approved Henry Sy’s demand for some 100 hectares more inside the civil aviation area for SM’s expansion and is now moving to drive away farmers tilling the area for the past two decades. This cuts into the space reserved for the civil aviation complex, the planned North Rail hub and cargo port.

Why this seeming obsession of Henry Sy with Clark?

The SM mall in San Fernando is a 15-minute ride from the proposed SM-Clark. The two malls within such a short distance will cut into each other’s market. This is most unsound business sense.

The SM Group is known to own a 100-hectare property in Barangay Tabun, Mabalacat, along MacArthur Highway near the Tarlac boundary. Why not develop a mall there instead to cater to residents of Tarlac, Pangasinan and northern Luzon? The SM Group is also known to co-own Makro in Barangay Mabiga, also in Mabalacat. Why can’t it just expand it into a mall?

* * *

SMUGGLING?: Is smuggling — a hidden and more profitable, albeit illegal, agendum — behind the SM-Clark project?

With its duty-free importation privilege as locator, what can prevent SM-Clark from importing consumer goods and farming these out to the SM branches all around the Philippines flooding the whole country with technically-smuggled merchandise?

The CDC can stop smuggling? How come duty-free imported goods still find their way out of Clark and Subic to the shelves of groceries, supermarkets and even sari-sari stores throughout Central Luzon, Metro Manila and beyond?

SM-Clark will wreak incalculable havoc on the business in Angeles and Mabalacat — mass bankruptcy, loss of employment and their attendant social costs. Its “potentials” for smuggling when realized will impact most adversely on the national economy.

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(First published in the Philippine STAR of April 14, 2005)

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