On January 8, 2019, Hanjin Heavy Industries and Construction Philippines (HHIC Phil), the largest shipyard in the Philippines and one of the largest private employers with the bulk of workers consisting of nearly 19,000 Filipinos, filed for corporate rehabilitation due to default or failure to comply its loan obligation of $412 million to five Philippine banks, becoming the biggest bankruptcy in the country.
Since then, the Philippine shipbuilding and ship repair industry has been on stand still. However, experts say that the industry can not only be revived but become the leader in shipbuilding and repair services if 1) we learn from our neighbors, 2) the Philippine government becomes a formidable partner and 3) we take baby steps.
“After what happened to Hanjin, the RORO industry could just be that top domino we are looking for to help bring our stagnant Philippine maritime industry back to life” says DTI Program Director Romulo Manlapig during a meeting hosted by the Philippine-Australian Business Council (PABC) on July 10 2019 at the Manila Elks Club, Corinthian Plaza, Makati City.
Manlapig, together with former Board of Investments (BOI) Governor Henry Co, are leading the roadmap for the Philippine shipbuilding industry, addressed the audience composed of representatives from the Department of Foreign Affairs (DFA) Office of Asia Pacific Affairs, the Australian Embassy, AusTrade, Australian-based ship building company Austal, and the Philippine mining and steel industries.
“Fifteen years ago, JICA (Japan International Cooperation Industry) already proposed this idea. It is only now that we are realizing this, once we rolled up our sleeves to work on the solution to our challenges. After World War 2, Japan’s maritime industry is similar to what the Philippines has now. It is a sad comparison, but it also gives us a glimpse of what can be done if the government becomes a key partner in rebuilding our maritime industry” the former BOI Governor, Henry Co said.
According to Manlapig and Co, the Philippine ShipBuilding and Ship Repair (SB/SR) Industry is the 4th largest in the world (2M GT/yr). Market share comes from 98% of foreign shipbuilders for export while 2% from our local shipbuilders for domestic distribution. The challenges in the industry include being plagued by high costs, low quality services, poor safety records and an aging fleet of used imported vessels.
“The RORO modernization program is the first step, and could be that top domino, to stir and propel our stagnant shipbuilding and ship repair industry. The vision is for our Philippine maritime services to become safe and efficient, has wide coverage, agglomerated, has updated technology, adequately capitalized with the right suppliers, and is an export champion” says Manlapig.
PABC Chairman and Quisumbing Torres Partner, Atty. Dennis Quintero says “Australian investments in the Philippine shipbuilding industry is one of the priority initiatives and advocacies of Philippine Ambassador to Australia Hellen De la Vega. We at the PABC is supporting this initiative.”
When asked separately if the Philippine President has seen BOI’s recommendations, Co says that there is absolutely no problem with the President. If given the chance, he says “PRRD would most likely say ‘Make it happen!’ however, the BOI (and the DTI) can only suggest how we can move forward with our Philippine Maritime industry. Ultimately, this initiative shall have to be spearheaded by the DOTR (Department of Transportation) and MARINA (Maritime Industry Authority)”.
For more information on the above story, refer to below articles:
- Philippine Star. Gonzales Iris., 15 July 2019. “Hanjin shipyard can become a major global port — Lopez”
- Philippine Star. Manantan, Mark., 10 May 2019. “China or Japan? The contest for Hanjin, the Philippines’ largest shipyard”
- Business Mirror. Ofreneo, Rene., 9 May 2019.”Hanjin as base for Philippines Shipbuilding”
- Business World. Ylagan, Amelia. 20 January 2019. “The mysterious death of Hanjin”
- Business World. 25 April 2018. ”Philippines role in ship building global value chain”
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