Prior to the eruption of the volcano Mt. Pinatubo, Olongapo was already classified a highly-urbanized city. Quite a feat considering there was no industry that was developed over the years except catering to the needs of its military neighbor. The U.S. naval base drove the local economy and businesses were all geared to fully support the base. As such, Olongapo’s economy was totally dependent on the U.S. naval base and failed to develop any industry that could generate other sources of revenue for the local government. Despite this economic drawback, however, Olongapo is well regarded and often considered a model city in the country with its innovations in local governance.
Much of the credit goes to Richard Juico Gordon, a lawyer and scion of a well known political clan, who since he became mayor in 1980, started to clean the city of its “sin city” image, disciplined the residents and visitors, and made efforts to rid it of crime. Among the projects he introduced was the color-coding of public transport and the systematic and efficient garbage collection.
When the long dormant volcano Mt. Pinatubo erupted in June 15, 1991, and the rejection of the extension of the RP-US Treaty in September 16 in the same year, Olongapo was hit by a double whammy and caused its economy to literally melt down.
 |
| A cloud of volcanic plume forms like a mushroom as Mt. Pinatubo erupts in 1991. |
| Residents suddenly became uncertain of their future with people out of jobs and businesses closed down. There was in fact a steady migration of people out of the city during this time that for a while it was labeled as a ghost town. |
Gordon, while heavily involved in efforts to make his city rise from the ashes of Mt. Pinatubo, had also started efforts to lobby for the retention of the U.S. naval Base, very much aware of the dire consequences of a sudden pull out from Subic Bay. He led people in staging rallies and even went to the Senate to ask the senators to extend the Treaty while Olongapo makes preparations for the U.S. military’s eventual withdrawal.
 |
| Newspaper headline on the defeat of the RP-US Treaty. |
| Gordon at the time, espoused the creation of ARGO, an acronym for Autonomous Region for Greater Olongapo, which envisions the establishment of a Freeport zone in Redondo Peninsula located across the naval base. Gordon’s vision involved making Olongapo a Freeport city as a key to avoid any dislocation that would arise from the withdrawal of U.S. forces from Subic Bay. |
His wife, Kate Gordon, the 1st District of Zambales Representative at that time also helped in lobbying for the creation of a law in Congress. Their campaign to push ARGO did not materialize and in its stead was created Republic Act 7227 otherwise known as “The Bases Conversion and Development Act of 1992.”
In March 13, 1992, the Philippine Congress passed RA 7227 in anticipation of the pullout of the U.S. military bases in the country. Section 13 of RA 7227 created the Subic Bay Metropolitan Authority (SBMA) to develop and manage the Freeport, which provides tax and duty-free privileges and incentives to business locators in the special economic zone.
Gordon became the first SBMA chairman and administrator.