Duterte open to government takeover of Hanjin
Posted 3 years ago
File photos show the Hanjin Heavy Industries and Construction-Philippines’ shipbuilding facility at the Subic Bay Freeport Zone (inset) and workers posing next to a newly completed vessel.
MANILA, Philippines — Concerned about saving thousands of Filipino jobs, President Duterte is open to a government takeover of the Subic Bay shipbuilding facilities of the bankrupt Hanjin Heavy Industries and Construction Philippines, Defense Secretary Delfin Lorenzana said yesterday.
He revealed Duterte’s position during the plenary deliberations on the proposed P183-billion budget for the Department of National Defense, in reaction to Senate Majority Leader Juan Miguel Zubiri’s calling the Hanjin debacle a “golden opportunity” for the DND to operate the South Korean giant’s shipbuilding facilities and save thousands of jobs.
While expressing sympathy for Hanjin over its financial woes, Lorenzana said he found interesting Navy chief Vice Adm. Robert Empedrad’s idea of government taking over and managing the company’s shipyard so the country can build its own vessels.
“I brought this idea to the President last night and he is very receptive to the idea,” Lorenzana told senators.
Hanjin, the biggest foreign investor in the Subic Bay Freeport, declared bankruptcy last Jan. 8. The firm owes about $430 million to five of the country’s biggest banks, Rizal Commercial Banking Corp., Land Bank of the Philippines, Metropolitan Bank and Trust Corp., Bank of the Philippine Islands and Banco de Oro Universal Bank.
The defense chief said the matter was also discussed with Finance Secretary Carlos Dominguez III, who expressed concern over how local banks would be able to recoup their investments in Hanjin.
Zubiri suggested the government take a majority stake in a private minority directly involved in the operations of the shipyard.
Sen. Panfilo Lacson suggested that a portion of the P75-billion alleged insertion in the proposed P3.757-trillion national budget this year be realigned to pay off the debts and later bid out a stake with private partners.
“What if the Philippine government will just take over Hanjin and bid out to possible partners, private entities? This will mean potential income for the government,” said Lacson, who also moved to have the Senate constitute itself into a committee of the whole to discuss the issue while tackling the DND’s budget.
He maintained that Hanjin’s plight would have far-reaching implications for Filipinos, ranging from security to economic and even social concerns.
In his proposal, Lacson said the Philippine government would continue to have income while the Philippine Navy may have a new facility.
He added appropriate agencies can hold consultations with the National Economic and Development Authority regarding partnerships between the government and a private entity.
But while the President and some of his officials are open to a government takeover of Hanjin’s Subic shipbuilding facilities, Budget Secretary Benjamin Diokno said the plan has to be thoroughly studied, as it would involve a “major shift” in the role of government.
“The role of government is to provide defense, national security and peace and order. It is not the role (of the government) to do the direct production of whatever they use,” Diokno said on the sidelines of the commissioning of two new fast patrol boats acquired from France for the Philippine Coast Guard (PCG). The commissioning was held at the PCG headquarters on Roxas Boulevard.
“Can you imagine the military producing their own ships? That is a major decision, we have to discuss it,” he added. “I want to see the complete proposal.”
“That is still a suggestion,” Diokno said, referring to Lorenzana’s plan. “We have to go over the financials… I want to see the complete proposal.”