Subic Bay Freeport Zone (SBFZ), which is known simply as Subic Bay, is the Philippines' first successful case of a military base converted through volunteerism into a tax- and duty-free zone similar to Hong Kong and Singapore, operated and managed by the Subic Bay Metropolitan Authority or SBMA. It covers the fenced area of the former U.S. Naval Base Subic Bay located in the southwest of Luzon Island in the Philippines and surrounded by the municipalities of Subic and Olongapo City in Zambales and Hermosa and Morong in Bataan, in concurrence of these municipalities' Sangguniang Bayan, pursuant to Section 12 of RA 7227. The harbor faces the Zambales Mountain Range to the west and the Subic Bay opening to the South China Sea.