Duterte open to gov't takeover of Hanjin facility in Subic--Lorenzana

Duterte open to gov't takeover of Hanjin facility in Subic--Lorenzana
AMITA LEGASPI, January 16, 2019 https://www.gmanetwork.com/news/money/companies/681633/duterte-open-to-g...

President Rodrigo Duterte is "very receptive" to the idea of a government takeover of the debt-saddled Hanjin Philippines and use this to build ships for the country's Navy and Coast Guard, Defense Secretary Delfin Lorenzana said Wednesday.

Lorenzana made the statement Wednesday when the senators raised the possibility of the government getting control of the South Korean shipyard in Subic during the deliberations on the proposed 2019 budget of the Department of National Defense.

Majority Leader Juan Miguel Zubiri said it would be a "golden opportunity" for the DND to use the Hanjin facility.

Lorenzana said while they sympathize with the financial woes of Hanjin, they are buoyed by the possibility of the Philippines having its own ship building capability.

“Navy Flag Officer in Command (Vice Admiral Robert) Empedrad mentioned to me why not we take over the Hanjin and give it to the Navy to manage. And so I brought this idea to the President last night and he is very receptive to the idea,” Zubiri said.

Zubiri said Finance Secretary Carlos Dominguez was apprehensive because he was thinking how the local banks can recoup their investments in the shipyard amounting to $430 million.

“But really this is perfect for us, we are actually ordering ships abroad. If we can keep this, we can build our own ships here, the Coast Guard also needs ships,” he said.

Lorenzana said the government can be a minority owner and the majority owner would be a civilian company but Zubiri and Senator Panfilo Lacson said the government could be the majority owner and partner with a private company.

“It could be that management of the facility is from private and majority of stakes will be with the government. Kapag nag-allocate na pondo imbes na bibili tayo, ipapagawa natin dito sa government owned and controlled corporation, some joint venture,” said Zubiri.

“Kumita pa tayo, ‘yung pondo na gagastusin, imbes na mapunta sa ibang bansa, Filipino pa ang gumagawa ng barko natin. I think this is a win-win solution,” he added.

Lacson said the government can take over the facility using the P75 billion floating fund in the proposed 2019 budget.

“The $430 million is roughly around P22-23 billion. There is a float of P75 billion in the proposed 2019 budget. Give or take nasa P100 billion kung isasama ang ALGU (assistance to local government units). So P22 billion, what if the government will just take over Hanjin and then bid out to possible partners, private entities? So kikita pa ang gobyerno di ba. Is that a good idea?” he asked Lorenzana.

The Defense secretary said it could be a good idea as the Navy has to build 20 ships in the next five years.

When asked by Lacson if the Navy can take over the facility, Empedrad replied that they can handle a portion of it.

“We cannot take over the entire Hanjin but a portion of it,” the Navy official said.

Hanjin Philippines filed last week a petition before the Regional Trial Court in Olongapo City for voluntary rehabilitation under Republic Act 10142 or the law providing for the rehabilitation or liquidation of financially distressed enterprises and individuals.

Hanjin Philippines officials revealed to the Subic Bay Metropolitan Authority that the company has around $400 million in outstanding loans from Philippine banks on top of $900 million in debts owed to South Korea lenders.

Two Chinese shipbuilding companies have expressed intent to invest in debt-riddled Hanjin Heavy Industries and Construction Philippines, the Department of Trade Industry (DTI) said last Friday, prompting former Philippine Navy chief Alexander Pama to remind the public that the development is not just about business. —LDF, GMA News