NEWSFLASH

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SUBIC-CLARK DUTY FREE PRICE WAR

Manila, Oct. 20, 1997 - There is a price war going on, and consumers like it. Owners of duty-free shops in Clark are crying foul, the airport main Duty Free Shop center is copying it, and Subic, which started it all, is enjoying brisk sales.

The fuss is all about the exchange rate applied when duty-free shoppers pay in pesos. Subic Freeport duty-free shops started a promo to compute dollars at a rate of P29.00/dollar to attract buyers after the peso rate plunged to P34 per dollar.

The scheme apparently was so successful that Duty Free Philippines at the Manila International Airport adopted it, even allowing pesos to be used for the first time in their stores. Duty Free Philippines went one step further by offering 15% blanket discounts on all purchases paid in US dollars.

Clark Field duty-free shops are now crying "foul" and are asking: Is it fair competition or economic warfare?

Duty-free stores at the two former US bases reported a significant drop in sales since the peso's devaluation in July. Those inside the Clark Special Economic Zone reported suffering an 80 percent drop in sales. The stores are trying to fight back by offering huge discounts of up to 50% on popular items such as canned goods and chocolates.

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