As US Closes Subic Base, Filipinos Greet Investors

THE United States military has just about packed up and moved out of what was their largest overseas base. The US Naval Station at Subic Bay, 50 miles northwest of Manila, was "disestablished" yesterday.

Most of the 1,500 remaining US military staff have moved to adjacent Cubi Point Naval Air Station and will leave the Philippines by the end of November, according to US military sources.

Unlike the gloom which marked the closure of Clark Air Base - another giant US military facility 10 miles from Subic, which was turned over to the Philippines last year - quiet optimism prevailed at yesterday's rainy ceremony.

It seems, if all goes well, Subic could become one of the region's best peace dividends.

There may come a day when US Navy vessels once again stop at Subic for refueling. But this time, the Navy might have to bring a credit card and wait in line behind other paying customers.

The Philippine government has been working diligently for more than a year on a plan to convert the 62,000-acre base to a private, commercial port.

"Today we are at the beginning of a new era in international relations when national power and influence depend not on military strength alone but on economic performance," said Richard Solomon, the US ambassador to the Philippines at yesterday's ceremony.

"It is our hope that the excellent harbor and valuable facilities that we are leaving behind will now contribute to the economic development of the Philippines," he said.

US military ships had dropped anchor in Subic Bay since 1907. Last year, the Philippines' nationalistic Senate vetoed an agreement that would have extended US military presence for another 10 years. Then-President Corazon Aquino gave the Americans until December 1992 to withdraw their troops from Philippine soil.

When US leaders tried to persuade the Philippine government to extend their lease, they painted a picture of economic ruin as the logical outcome of US departure. But now, even as the Navy loads the last of its "moveable assets" onto ships and trucks, the prospect of a major industrial-commercial complex at Subic has international investors making the three-hour trip north from Manila to check out the airport, warehouses, and ship-repair facility now up for grabs. Multinational prospects

A representative of the Perot Group visited the base recently, various US and Asian oil companies are competing to lease the giant fuel depot, Keppel Corporation Ltd., a Singaporean shipping firm, is considering the ship-repair facility, and Taiwanese Minister of Economics Vincent Siew took a helicopter tour of Subic, declaring the location ideal for the relocation of his country's labor-intensive industry.

The guest book of the Subic Bay Metropolitan Authority (SBMA), the agency responsible for the conversion, reads like a "who's who" of multi-national corporations with interests in Southeast Asia.

Businessmen say the situation has begun to jell since Fidel Ramos took over as president June 30 following what was perceived as one of the country's smoothest elections in history. Economists are predicting the country will pull out of a year-long slump. And investors are applauding Mr. Ramos's early moves to liberalize foreign exchange, remove trade barriers, and crack down on crime.

The US is transferring much of the giant facility's infrastructure to other bases. Three critical floating dry-docks have been towed away and even the hardwood floors of the bowling alley have been pulled up. Even so, what is left behind is worth billions of dollars:

* An airport capable of landing a Boeing 747 airliner.

* Thousands of warehouses which could be converted to factories.

* One of the largest ship-repair facilities in the world, boasting 37 berths.

* A 26.4 megawatt power plant.

* Hundreds of residential housing units and offices.

Keppel, a contractor to the US Navy at Subic, is reported to be near closing a deal on the ship-repair facility. With this locked in place, the 2.4-million-barrel-capacity petroleum, oil, and lubricants depot, which could refuel passing ships or those in for repair, becomes a lucrative prize.

Transforming warehouses into factories is the second major conversion exercise. The Taiwanese government wants the contract, but so does the Japanese company Marubeni, according to the SBMA - and some 10 multinational and local firms are said to have expressed interest in setting up shop. Some risk involved

There is still considerable risk for investors: Government incentives, policy, and guidelines are loosely defined at best; political infighting over control of the conversion is possible; and the government may have difficulty keeping the base running smoothly until it is transferred to private companies.

The signing of the first big deal, which is expected to start the momentum toward commercialization, has yet to take place. But the allure of profit-taking has been a powerful enough draw to bring in opportunity-seekers - a critical first step.