AQUINO SAYS US NAVAL BASE COULD BECOME A FREE PORT

AQUINO SAYS US NAVAL BASE COULD BECOME A FREE PORT

Philippine President Corazon Aquino Tuesday suggested turning Subic naval base into a Hong Kong-style free port to cushion the impact on the economy of a U.S. military pullout.

Speaking before 5,000 people gathered at an American football field inside the base in Olongapo city, Mrs. Aquino said she is confident the Philippines will overcome the challenge posed by the projected withdrawal of U.S. forces by the end of this year."We must not allow the city of Olongapo to die with the pullout of U.S. forces from Subic," Mrs. Aquino told officials, base workers and hundreds of bar girls given three hours off by their employers and allowed into the base to see the president.

The base, a U.S. Seventh Fleet repair yard and ammunitions depot, could be "the nucleus of a growth center" in the Philippines, she said.

Mrs. Aquino said she had ordered a government panel to study ways of turning the 14,400-acre base from military to commercial use.

"The plan includes setting up a special economic zone with the status of a free port like Hong Kong," she said.

Following the Philippine Senate's rejection in September of a bases pact with the United States, Manila gave Washington until December 1992 to withdraw

from its last military base in the former colony.

The base, a deep natural harbor 50 miles northwest of Manila, has remained in operation, sending out ships to patrol trade routes in the Indian and Pacific Oceans, despite the heavy damage it suffered from the eruption of the Mount Pinatubo volcano in June.

The volcano wrecked and forced the closure of U.S. Clark Air Base in nearby Pampanga province.

With the projected U.S. pullout, this city of 300,000 people stands to lose $350 million a year that base-generated businesses injected into its economy each year.

Subic's closure would throw 38,000 Filipinos out of work. Many have received notices of termination, with about a third expected to be laid off by March, officials said.

Mrs. Aquino, whose term ends in six months, is pressing Congress to approve a bill creating a bases conversion development authority to deal with businesses entering the economic zones planned at Subic and Clark.

Mrs. Aquino flew to Subic by helicopter and toured the base with Frank Wisner, U.S. ambassador, to see buildings damaged by the volcano.