Privilege speech of Akbayan Partylist Rep. Tom Villarin
January 14, 2019
Mr. Speaker, I rise on a personal and collective privilege.
Last January 8, 2019, Hanjin Heavy Industries and Construction Philippines, a South Korean shipbuilding company based in Subic port, Zambales, filed for bankruptcy leaving some US$412-M in outstanding loans with local banks in limbo. This also places some 22,000 workers and their jobs in peril as well as loses to the local economy.
A report claimed 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. These banks are among the top 10 banks in the country and the biggest lenders to business.
Despite the Banko Sentral ng Pilipinas (BSP)’s pronouncement that its impact in the banking system is negligible, stock prices of three of the listed banks fell in the wake of the news. Shares at RCBC suffered the steepest blow as it dropped by 9.12% on Friday, while Metrobank and BPI stock prices went down by 4.82% and 4.76%, respectively. BDO shares, though steadied from the initial shock, have the least exposure among the Hanjin lenders.
The lenders are said to be working to take control of Hanjin’s property in Zambales, with assets estimated at $1.6 billion.
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.
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 liquify assets, our workers might end up empty handed and doubly victimized with loss of job and benefits.
Now, we hear news that 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 aircrafts 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, we would leave us defenseless and highly vulnerable.
Madam Speaker, this 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.
As a maritime nation, the ship-building industry can be our comparative advantage. An inherent strength of the sector, which still needs to be fully taken advantage of, is the country’s strategic location to the shipping routes of oceangoing ships serving the Asia-Pacific region.
Such strategic location 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. For this inherently strategic strength to be realized, the country’s shipyards would need to be capable and competitive with neighboring foreign shipyards, in servicing the drydocking and/or repair requirements of oceangoing ships.
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. 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.
The shipbuilding industry refers to the sector involved in the construction, launching, and outfitting of watercrafts, while the ship repair industry deals with the overhaul, improvement, alteration, and reconditioning of water vessels. 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. 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.
The country’s ship building and ship repair sector weave together and complement the maritime transport/shipping sector in an archipelagic country such as the Philippines. With a network of transport hubs and ships, these sectors can serves as the lifelines and linkages for the movement of cargos, products, and people between and among the island-economies. It can likewise boost tourism with brand new ships that are faster and more efficient. The safety and efficiency of domestic ships, however, will depend on the availability, capability, and capacity of our ship repair industry to maintain the vessels’ seaworthiness, especially for repairs and during a ship’s drydocking.
Considering the age profile of most second-hand domestic ships, their repair and maintenance are basically dependent on the country’s ship repair sector, in order to comply with safety standards and requirements. On the other hand, domestic demands for new ships, in line with the country’s domestic shipping modernization efforts, would need to be catered to by the ship building sector.
Mr. Speaker, dear colleagues, this representation calls on our national government to:
Ensure that workers who are and will be affected by the Hanjin default are compensated, and their post-employment benefits secured;
Prioritize national security in shaping the future of Hanjin’s properties in the Subic port area, a strategic location for maritime and military purposes;
Examine the possibility of the national government to undertake shipbuilding as its cornerstone industrial policy.
Thank you and good day! #