THE Philippine Government yesterday backed away from dealing what could have been a near-fatal blow to the Subic Bay Metropolitan Authority (SBMA) by allowing it to offer a package of tax and duty-free privileges for investors at the former American naval base. SBMA administrator Richard Gordon said after a series of meetings with Philippine President Fidel Ramos and other officials that the Government has agreed to amend an executive order that covers only the importation of raw materials, capital and equipment. Under the amended executive order, the SBMA will also be able to offer limited exemptions to local and foreign visitors to the base for such items as liquor, cosmetics, confections, electronic goods and other consumer items. ''We are still a free port,'' Mr Gordon said. ''Nothing has changed.'' Mr Gordon said foreign visitors would be allowed to buy up to US$200 worth of goods a year and residents will be allowed an exemption of $100. No limit will be imposed on goods consumed on the base property. For the past two days, Manila newspapers have published prominent reports about attempts by the president's staff to restrict duty-and tax-free importation of consumer goods at Subic Bay. Opposition had also reportedly come from the departments of justice and finance, and the bureaus of customs and internal revenue. ''This is a big victory for us,'' Mr Gordon said. He added that had the Government not granted the exemptions, the SBMA could have been accused of misleading investors in its sales material. ''We were opening up ourselves to accusations that the Philippines wants to change the rules in the middle of the game,'' said Mr Gordon. Earlier he said strict limits on visitors using the base would have scared away several potential investors. SBMA officials are banking on several liberal measures to help them turn the 17,000-hectare facility into a ''mini Hongkong'' - complete with duty and tax privileges. About 15 ventures - including a huge investment by US-based Coastal Petroleum - have been approved. In another development, Mr Gordon said freight giant Federal Express Corp was close to making a decision on the site of its new Asian hub and that Subic Bay had a good chance of being chosen. ''I think we have a pretty good chance of snaring the deal,'' he said, adding that Federal Express had invited him to its headquarters next month for meetings. Two other Philippines sites are under consideration - Manila's Ninoy Aquino International Airport and the Mactan International Airport in Cebu City. Also in the running are Hongkong, Macau, Shenzhen, Taipei, Okinawa and Seoul.