P50B ship modernization fund untapped – Marina

P50B ship modernization fund untapped – Marina
Genivi Verdejo June 12, 2024 https://www.manilatimes.net/2024/06/12/business/maritime/p50b-ship-moder...

THE Development Bank of the Philippines' (DBP) P50 billion financing facility for fleet upgrades remains untapped as ship operators struggle with post-pandemic recovery, the Maritime Industry Authority (Marina) said.

"Operators are still recovering from the economic downturn caused by the Covid-19 pandemic. When assessed by banks, their capacity to pay is not deemed sufficient, which deters them from availing these loans," Marina Administrator Sonia Malaluan said.

A key issue is the need for standardized ship designs. The estimated modernization costs range from P50 million to P100 million.

"We are developing standardized designs to provide clearer guidelines and cost expectations for ship operators. This will help them understand the financial commitments and make informed decisions," Malaluan said.

Marina and DBP are exploring incentives to make the financing more attractive, aiming for single-digit interest rates.

"Interest rates must be competitive, ideally in the single digits, but it depends on the final terms set by the DBP," she added.

Malaluan highlighted Batangas and Eastern Visayas as areas where modernization could boost local economies. "Modernizing the fleet in these regions will improve safety and efficiency and boost tourism and trade," she said.

Marina is committed to assisting operators, focusing on digitalization, safety improvements, and ease of doing business to attract more investors. "We have specific targets for this year and next. Slowly but surely, we will focus and deliver on these initiatives," Malaluan said.