SEA PORT RUNNING SHIPSHAPE : PHILIPPINE HARBOR LIFTS NATION'S CAPITAL.

Byline: Seth Mydans The New York Times

When President Clinton and 17 other world leaders gather here Nov. 25 for an economic conference, they will stay in new luxury villas built on the site of ammunition bunkers at what was once one of America's main overseas military bases.

They will discuss international trade at a converted officers' club with a balcony that looks out over a vast tax-free port and industrial complex that has quickly become a model for the conversion of a military base to civilian uses.

``It is a coming-out party of the Philippines, not only for Manila and Subic but for the entire country,'' President Fidel Ramos said as he toured the former base before the Asia-Pacific Economic Cooperation meeting opens Wednesday.

The rapid conversion of Subic Bay Naval Station and nearby Clark Air Base over the last four years since the Americans were booted out has emerged as a symbol for the country's economic success under Ramos, a sign that Filipinos, somewhat to their own surprise, can make it without the Americans.

While much of the region is suffering through an economic slowdown, the Philippine economy is picking up steam, growing by more than 7 percent a year. Inflation has dropped to 4.4 percent, exports are growing, and the budget is in surplus for a third consecutive year.

Richard Gordon, chairman of the Subic Bay Metropolitan Authority, which administers the port, said officials from around Europe and Asia had visited to study his model of base conversion, including the leaders of Panama, Vietnam and Lithuania and representatives from Guam and Okinawa, Japan.

In an interview, Gordon seemed as astonished as anyone at his success; he is the grandson of a U.S. serviceman and had been one of the foremost lobbyists for retention of the bases, arguing that few preparations had been made for their conversion.

Despite lobbying by him and by former President Corazon Aquino, the Philippine Senate, fired by a wave of nationalism, voted in 1991 not to extend the lease of the bases. It ended a U.S. military presence in the Philippines that began with the withdrawal of the Spanish in 1898.

When the U.S. flag was lowered at Subic on Nov. 24, 1992, predictions of economic ruin were almost universal. U.S. Defense Secretary Dick Cheney predicted that closing the bases would be ``a real tragedy for the Philippines.''

Together, the bases were the nation's second-largest employer, after the government itself, directly employing more than 68,000 Filipinos and contributing about $28 million a day to the local economy.

When they pulled out of Subic, the Americans left behind $8 billion in infrastructure, but took with them almost everything portable, including dozens of bowling lanes, the communications system and, most important, the floating dry docks that could have boosted Subic's hopes to be a ship repair center for the region.

``A lot of people were apprehensive,'' said Ferdinand Roaquin, a local resident who now works in Gordon's office. ``We grew up with the Americans. My mother was a little bit (saddened) when they left.''

Predictions of disaster seemed at first to be confirmed when looters stripped the Clark base of everything from light fixtures to toilet bowls when the Americans abandoned it in 1991 after it was buried in volcanic ash by the eruption of Mount Pinatubo.

But at Subic, Gordon enlisted 8,000 unpaid volunteers to guard the empty base and maintain its buildings, power plant and storage tanks until new tenants could be attracted.

With the region's economy growing then, it proved surprisingly easy to attract manufacturing and investment. Now, four years later, employment here has actually risen, Gordon said, with 55,000 people working in the Subic port alone, mostly in foreign-operated factories.

Some of those are former workers on the U.S. base. Some other craftsmen on the base found similar work in Guam or elsewhere overseas. But many - like the prostitutes in the now-darkened red-light district of the neighboring town of Olongapo - dispersed throughout the Philippines in search of other work.

Today more than 200 companies have invested $1.6 billion in Subic, and 150 companies have put $257 million into Clark, according to official figures.

Here at Subic, Japanese and Taiwanese industrial parks manufacture a variety of products, from computer motherboards to armored personnel carriers. Their total exports have risen every year, to $263 million in the first 10 months of this year, Gordon said.

In its biggest coup, Subic has become the regional hub for Federal Express, which has taken over former military warehouses and now makes an average of 67 landings a night on a newly reinforced runway, ferrying everything from Timex watches to fresh tuna around Asia.