DESPITE the warning by a former Navy chief about its possible security implications and advice by a big labor coalition to explore alternative options in the search for white knights, Malacañang sees no problem so far with the possible takeover by Chinese firms of Hanjin Heavy Industries and Construction-Philippines (HHIC-Phil) in Subic, Zambales.
Former Philippine Navy chief Alexander P. Pama had warned that China’s ownership of Hanjin’s shipyard will give “unlimited access to one of the Philippines’s most strategic geographic naval and maritime assets.”
Palace Spokesmann Salvador S. Panelo said on Monday, however: “Kung Chinese company naman na dati na nating ka-deal at wala namang problema e di walang isyu. E kung hindi natin kilala, e di syempre we have to vet [If it is a Chinese company which we have dealt with before and there was no issue, then there will be no issue at all. If it is someone we don’t know, then of course, we have to vet].”
Panelo also dismissed as “speculation” the reported takeover of Hanjin’s operations in the Philippines, adding that there is no cause for concern “for now” as it is “all rumor.”
“Speculation pa lang iyon na they will take over. When a company declares bankruptcy, oh eh di sino naman magkakainteresadong kunin iyon (It’s just speculation that they will take over. When a company declares bankruptcy, then whoever will be interested in taking over that?,” he said.
A lawmaker, however, on Monday urged the government to take over the shipbuilding industry to defend the country’s national security and jump-start
industrialization.
In his privilege speech, Akbayan Rep. Tom Villarin said Subic port is a strategic location that can be maximized by transforming it into a hub for ship repair, as a drydock for oceangoing ships, including fishing vessels operating in international waters
Villarin, citing reports, said Chinese shipbuilding companies are keen to take over the Hanjin Shipyard located in a very strategic maritime and military facility
“Subic port was once home to the US naval fleet and stationed its most advanced aircraft and ships. This default by Hanjin Philippines comes at a time when our country’s national security is at high risk because of Chinese incursions into our sovereign territory, especially in the West Philippine Sea. With these state-owned Chinese corporations taking over the Subic shipyard and nearby ports, [such] would leave us defenseless and highly vulnerable,” he said.
‘Significant national security issue’
In his post on Saturday, former Navy chief Pama said that the public should be aware that the “Hanjin shipyard issue is not just about business, financial and other economic issues,” as he stressed that this is “a very significant national security issue.”
He continued: “Although it is a commercial shipyard, nothing can prevent the owners from making it into a de facto Naval base and a maritime facility for other security purposes! Let us all be aware and wary of the serious security and other strategic implications of this issue! I urge our patriotic business community and the government not to allow Hanjin Shipyard to fall into the wrong hands!”
It was Trade Undersecretary Ceferino S. Rodolfo Jr. who revealed on Friday that the government is linking Hanjin with two Chinese firms that are interested in the country’s shipbuilding industry.
“Remember, the total cumulative investments of Hanjin in that shipyard facility is $2.6 billion. [The entry of a foreign investor is] really just to tide them over, pay the debt and they can take over the facility, [as well as] the operation,” Rodolfo was quoted as saying. He added the foreign investor must have a working capital of about $12 million monthly to shoulder all of
Hanjin’s debts.
Hanjin is the largest investor in the Subic economic zone, and is one of the biggest employers in the whole of Zambales. Its financial struggle, however, has forced it to retrench 7,000 workers in December of last year. Sources had said earlier there were plans to retrench 3,000 more in 2019.
For its part, labor coalition Nagkaisa had rejected proposals to allow Chinese firms to take over the operations of the company. Instead, he said, the government should seek European intervention to save the ailing shipbuilding firm.
“We will bring up this matter with DOLE Secretary [Silvestre] Bello in the coming tripartite meeting on January 16,” Nagkaisa Chairman Sonny Matula said, referring to the National Tripartite Industrial Peace Council (NTIPC).
Matula urged the government to form a joint task force with representatives from the Department of Labor and Employment (DOLE), Department of Trade and Industry (DTI) and Department of Finance (DOF) to oversee the rehabilitation of HHICC-Phil.
Biggest bank’s
Meanwhile, Villarin in his speech also cited a report saying that the Rizal Commercial Banking Corp. (RCBC), the state-owned Land Bank of the Philippines, Metropolitan Bank & Trust Co. (Metrobank), Bank of the Philippine Islands (BPI), and BDO Unibank, Inc. are now working together to cover their combined loan exposure to the Korean conglomerate.
The lenders are said to be working to take control of Hanjin’s property in Zambales, with assets estimated at $1.6 billion, he added.
“On instinct, these lending banks would rather sell off the assets of the debtor to immediately recoup their loans and limit exposure. Rather than undertake corporate rehabilitation which might not be to the best interest of the banks, they would rather have all the assets up for grabs,” the lawmaker said.
“Amid the noise of this biggest default in the country’s banking history, our workers have to be prioritized in terms of severance packages and providing them alternate jobs. In the mad rush to liquefy assets, our workers might end up empty-handed and doubly victimized with loss of job and benefits,” he added.
“Another strength of the sector is the readily available and easily trainable technical and skilled manpower for shipbuilding and ship repair works in the country,” he said.
“Many Filipino workers have inherent skills for shipyard-related jobs like welding, pipe fitting, molding, etc., including technical/engineering competence. With comprehensive training programs, a pool of skilled shipyard manpower can easily become a basic asset of the sector, not only for local shipyard requirements but also for foreign-based shipyards. This would jump-start a push for industrialization and job creation,” he said.
The lawmaker said the Philippines now ranks No. 4 among the largest shipbuilding nations in the world outpacing Europe. South Korea, China and Japan, are respectively the first, second and third largest shipbuilding nations worldwide.
“The arrival of foreign shipbuilders in the Philippines propelled the export growth of Philippine-made ships in the international market. Given the stimulus investment packages, which hopefully can be continued, the Philippine government can undertake joint ventures with other countries that pose no immediate threat to its sovereignty,” he said.
“These countries can be the Nordic countries—Norway, Sweden, Denmark and other European nations. These are also countries to which we send our seafarers and this can serve as a complementary undertaking,” he added.
Villarin said Hanjin default should be a wake-up call to this government to take seriously our national security.
“It is high time that our government take over and undertake ship building as a major national industrial policy linked to protecting our national security,” he said.
Emergency meeting
THE DOLE will hold an emergency meeting on Tuesday to finalize its possible intervention for displaced workers of HHIC-Phil.
Labor executives will be getting the reports of the DOLE-Region 3 on the over 7,000 retrenched HHIC-Phil employees.
“Labor and Employment Secretary Silvestre H. Bello will attend the meeting to determine how to cushion the impact of the financial problem of Hanjin,” DOLE Information and Publication Service Director Rolly Francia said in an interview.
Labor Assistant Secretary Benjo M. Benavidez said the initial results of the profiling conducted by DOLE’s Central Luzon office on the displaced workers will be presented at the meeting.
DOLE officials said the profiling aims to determine the skills and location of the affected workers so they could be provided with appropriate alternative employment opportunities.
Currently, only around 4,000 of 11,526 workers are left in the HHIC-Phil following a significant decline in the number of its clients in previous months.
Labor groups have been urging the government to give priority to providing aid to the displaced workers over rescuing the finances of the Korean shipbuilding firm based in Zambales.
Kilusang Mayo Uno (KMU) said this should be a condition before HHIC-Phil is extended financial relief.
It wants authorities to investigate how the firm incurred a $400-million debt despite enjoying incentives from the government.