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Big Baguio investment loss bared

[ Manila Bulletin Online ] July 26, 2008

Failure to close airport prompts foreign firms to cancel investments

BAGUIO CITY – This mountain resort city has suffered a huge economic loss arising from a decision not to close the Loakan airport.

The closure of the airport would have paved the way for the expansion of the area of city’s economic zone where various foreign companies would set up their factories and plants.

However, as a result of the decision to continue the operations of the Loakan airport, there is no more area for the expansion of the economic zone.

This prompted foreign investors to cancel their plans to invest millions of dollars in the city.

Some businessmen and economists here said that city officials and President Arroyo might have been ill-advised on the decision to continue the operations of the airport.

They might have failed to consider the huge benefits from the investments that would have poured in the city if the aiport is used as an area for the expansion of the economic zone, they said.

This group of local businessmen said that the cost-benefit of operating the Loakan airport is very minimal compared to that of expanding the economic zone’s areas where foreign investors would be accommodated.

The additional investments would generate additional employment opportunities as well as more income for the city government, they also said.

The overall result would be a more vibrant economy of the city, they added.

Contrary to the claim of tourism stakeholders that the Loakan airport has been playing a vital role in increasing the city’s tourist arrivals, the businessmen and economists noted that only less than one percent of the annual tourist arrivals in the city entered through the Loakan airport due to limited flights, limited plane capacity and unpredictable schedule caused by the erratic weather in the city.

Reacting to the President’s call for city officials to help find a wide track of land for the expansion of the economic zone, the businessmen said this plan would entail a huge investments by the Philippine Economic Zone Authority (PEZA) and the locators.

Some city leaders said that expanding the economic zone in the area of the Loakan airport would result in employment opportunities of the thousands of graduates from Northern Luzon.

The new locators would surely need people for their operations, they said.

With work available, people would have money to spend, and this would result in the collection of more taxes by the city government, they also said.

With more income, the city government would have funds for the implementation of priority projects and speedy delivery of basic services.

They said that Loakan airport would not be totally closed if the economic zone is expanded in the area because it is still important to maintain at least a helipad in the area.

The executives of the foreign firms locating in the zone would need choppers for the speedy transportation, they said.

Once the Poro Point international airport in San Fernando City, La Union is be operational, the locators would save on the transportation cost of their products because the airport would be nearer than those in Clark and Subic.

The leaders challenged the members of the academe to conduct a series of debates on the airport issue.

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