A Filipino company’s acquisition of the shipbuilding business of the debt-ridden Hanjin Heavy Industries and Construction Philippines will be beneficial to the ongoing modernization efforts of the Philippine Navy.
This was disclosed by Defense Secretary Delfin Lorenzana when asked Tuesday if it is possible that HHIC-Phil can be tapped for the ongoing Self-Reliance Project of the country.
“We still lack complete information about it so I will defer any comment. Anyway, our economic managers are looking into it. [It] would be good if a local company would acquire and operate it to support our Navy modernization,” Lorenzana added in a text message.
The defense chief, however, said dealing with the matter is still up to the country’s economic team.
“It [is] up to them to decide but that is the ideal set up,” he said.
Lorenzana earlier said that the DND will monitor those who have expressed interest to invest in HHIC-Phil as it is near the Philippine Navy’s major docking and anchorage area of its large naval vessels.
Hanjin revealed that it has USD1.3 billion outstanding loans—USD400 million from Philippine banks and USD900 million from South Korean lenders.
According to Subic Bay Metropolitan Authority, HHIC-Phil filed a petition Tuesday last week at the Regional Trial Court in Olongapo City “to initiate voluntary rehabilitation under Republic Act 10142, otherwise known as “An Act Providing for the Rehabilitation or Liquidation of Financially Distressed Enterprises and Individuals.”
With this, Hanjin has sought help from the government to find investors that can take over the operation of its shipyard in Subic, as well as to help its employees, who have taken the brunt of the company’s financial woes.
In December 2018, the company laid off more than 7,000 workers.
Meanwhile, opposition lawmaker and Magdalo Rep. Gary Alejano warns on security implications on possible Chinese takeover of Hanjin Philippines after it has declared bankruptcy.
“Hanjin is the largest Philippine shipyard which is located in Subic. The Chinese takeover of Hanjin then allows unlimited access to a highly strategic naval and maritime asset of the country. This may have repercussions on our national security,” Alejano said.
Alejano made the statement as he cited reports that two Chinese shipbuilding firms are interested to take over the operations of Hanjin in the Philippines. One of the Chinese firms is state-owned, he said.
Alejano also echoed the concern of former Philippine Navy Chief Vice Admiral Alexander Pama on the Chinese takeover of Hanjin. Pama said the takeover could lead to China using Subic as a naval base and maritime facility.
Alejano shared a similar view, especially given the geographic location of Subic and China’s history of illegal occupation of our territory.
“I share the sentiments of Vice Admiral Pama. The Hanjin shipyard in Subic is facing the West Philippine Sea which could provide China easier access in our territory. Their resupply missions for their troops in reclaimed islands would be faster and monitoring of fishing activity in our waters would be less challenging. China could also base their assets in the area for intelligence gathering and monitoring of activity in our waters,” Alejano said.
The lawmaker called on the government “to seriously consider the impact of allowing Chinese firms to take over the largest shipyard in our country.”
“This seemingly commercial venture could be taken advantage to pursue the interests of China in the West Philippine Sea,” said Alejano.
As this developed, the Department of Labor and Employment assured affected workers of Hanjin Heavy Industry that they will get their separation pay, which is equivalent to one-month salary per year of service.
Thousands of workers of the ship building firm were displaced after the Korean shipbuilder declared bankruptcy and applied for rehabilitation.
Labor Secretary Silvestre Bello III said affected workers will get their separation pay, which is equivalent to one-month salary per year of service.
“The Subic Shipbuilder Corporation (SUSHICOR), Hanjin’s general contractor in shipbuilding, has given us assurance that their workers will get their separation pay and fulfill their labor obligations under the supervision of DOLE Region 3,” Bello said.
Aside from ensuring assistance to the affected workers, DOLE through its regional office in Region 3 and Bureau of Local Employment will conduct profiling of workers for the provision of appropriate services and interventions necessary for their possible re-employment as most of the Hanjin workers are highly skilled and in-demand in the country and in abroad.
“We need to profile the workers first to know their specific skills, preference of assistance – whether employment, livelihood or training for other skills to better match them with available job opportunities, including available jobs offered under the Build Build Build program of the President,” Bello said.
The labor chief also said that he will meet with Department of Trade and Industry (DTI), Department of Transportation (DOTr), and Department of Public Works and Highways (DPWH) for the possible re-employment of the Hanjin workers in the various projects of the government.
As of January 15, 2019, there are about 3,800 workers who are still employed under reduced working days to finish two more ships in Hanjin within the first quarter of 2019. These are employed by 17 contractors who will apply for retrenchment once their contracts with Hanjin is completed.