A party-list organization has vowed to work for the passage of a law that would give incentives to local shipbuilding and ship repair (SSBR) companies in a bid to create more jobs for Filipinos.
“Foreign companies have the advantage over the local shipbuilders. Foreign firms have incentives, so how come Filipino firms do not enjoy the same perks?” said ANGKLA nominee Jesulito Manalo.
“We also have to prioritize the availability of credit because you have a huge capital requirement. The available credit line is not easily accessible, so how can you modernize?” he added.
The country’s SBSR industry remains dominated by foreign-owned companies even with the departure of Korean shipbuilder Hanjin Heavy Industries & Construction Philippines in 2019.
Other foreign-owned companies operating in the country include Austal and Tsuneishi in Cebu and Keppel in Subic.
Foreign shipbuilders enjoy substantial incentives for setting up their shipyards in the country.
These include income tax holiday, tax and duty-free importation of equipment and parts, exemption from wharfage dues on import shipments of equipment, VAT exemption on local purchases of goods and services, and exemption from paying local government fees, licenses or taxes.
For non-fiscal incentives, foreign-owned companies are also granted simplified import-export procedures. They can also employ foreign nationals who enjoy special non-immigrant visas with multiple entry privileges.
Manalo said a strategy should be firmed up patterned after Japan’s shipbuilding industry that created a market for domestic shipbuilders. Tokyo modernized its domestic shipping industry by granting fiscal incentives both to Japanese ship owners to help them upgrade their fleet and to shipbuilders to allow them to build affordable ships.