As negotiations on the requirements for the manufacturing component of the Kaoshiung-Subic-Clark Economic Corridor bogged down with no clear direction, the Subic Bay Metropolitan Authority (SBMA) is pushing instead for immediate special tourism visa arrangements to tap the huge Taiwanese tourist potentials.

SBMA Administrator Armand C. Arreza told reporters during a recent interview that the guidelines governing the treatment of manufacturing investments by Taiwanese investors in Subic and Clark have not been completed as negotiations on the local content treatment bogged down.

Since there is no clear indication as to when the issue be resolved, Arreza has proposed that the Philippines should better go ahead with the forging of special visa arrangement for Taiwanese tourists to facilitate their entry into Subic and Clark.

“If we cannot yet benefit from the manufacturing component of the economic corridor agreement, then we might as well take advantage of the huge Taiwanese tourists by facilitating their entry into Subic and Clark freeports,” Arreza said.

The Taiwanese have been pressing for a much lower local content requirement than the ASEAN local content in their manufacturing their products in Subic and Clark

At present, the Philippines could only offer the same ASEAN national treatment policy to Taiwanese investors of 40 percent local content and sell up to 30 percent of their production to the local market.

On the other hand, the Taiwanese are still insisting on a 25 percent local content requirement.

Meeting the local content requirement of 40 percent is required to enable a manufacturer in an ASEAN member country to be able to export its product to avail of the national treatment, which would enable the company to enjoy the preferential tariff under the ASEAN Common Effective Preferential Tariff scheme.

The Philippines, a member of the ASEAN Free Trade Area, cannot also go lower than what has been implemented in ASEAN.

The Memorandum of Understanding for the RP-Taiwan Economic Corridor linking Subic/Clark and Kaoshiung was signed in December 2005, but has not been implemented.

Some of the offers perks being offered under the RP-Taiwan Economic Corridor Agreement include free-rent for 25 years in Clark to Taiwanese investors on condition they are going to develop the raw land, a move that is expected to make the country's incentive package more attractive to investors.

The Manila Economic and Cultural Office in Taipei had been stressing for the need for government to come up with competitive incentive package because Vietnam is attracting more investments.

"We're looking at parcels of raw land in Clark and get big Taiwanese companies to develop the land as part of the rental fee for the next 25 years. We can deduct the development cost for the lease payments," said MECO commercial affairs director Dita Angara-Mathay said.

Angara-Mathay said they have initially identified 1,000 hectares of idle raw land suitable for high-end manufacturing in Clark .

"This is one of our creative solutions," she said.

Clark is a good site because it is a component Kaoshiung-Subic-Clark Economic Corridor.

"This incentive would be exclusive for Taiwanese investors as part of the economic corridor incentive package," she said.