Philippines considering takeover of strategic shipyard in Subic Bay

Hanjin Heavy Industries and Construction Philippines'shipyard in Subic Bay is considered as the largest shipbuilding facility in the country.

The Philippines' Department of National Defense (DND) is looking at the possibility of taking-over South Korean shipbuilder Hanjin Heavy Industries and Construction's (HHIC) commercial shipbuilding yard, which is strategically located at the former US naval base at Subic Bay. This is after the company defaulted in its debts to South Korean and Philippine financial institutions amounting to US$1.2 billion.

Should HHIC fail to settle its debts, Defense Secretary Delfin Lorenzana proposed that of having the Philippine government take control of the shipyard to allow the local construction of naval and coast guard ships for the Philippine Navy and Philippine Coast Guard.

It was also mentioned that Philippine President Rodrigo Duterte is also “receptive” to the idea. The Philippine Navy's chief Vice Admiral Robert Empedrad also supporting the idea of having the service branch partially owning and managing the shipyard.

HHICP already submitted itself to voluntary rehabilitation under Philippine laws, although the possibility of the company giving way for others to acquire the shipyard is very likely.

Among the ideas brought out was for the Philippine government to be a minority owner while a civilian company would be a partner as a majority owner, or the other way around.

The Philippine Navy is said to be planning the construction of at least 20 new ships for the next 5 years, and was groomed to receive the highest allocation for the AFP Modernization Program’s Horizon 2 phase between 2018 to 2022.

Among those expected to be approved for construction are 2 corvettes, 6 offshore patrol vessels, at least 2 more landing platform docks, 2 to 3 submarines, and several support ships and patrol boats.



[1] GMA News
[2] Rappler
[3] MaxDefense Philippines
[4] Seapower International