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Philippines At Odds Between Chinese Investment and Maritime Security

Due to the considerably high expenditure involved in weapons upgrade, venturing into the Subic shipyard will need a great deal of money which the government cannot provide at the moment.

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Following the closure of Hanjin Heavy Industries (HHI) during the start of 2019, the Philippine government is faced with a dilemma that goes beyond the plight of 3,000 Filipino workers who were laid-off. The South Korean ship-building firm is in dire straits. It currently owes creditors around $1.3 billion of which $400 million of is to be paid to Philippine banks.

Since starting its operations back in 2006 at the former US naval base in Subic where it occupied around 300 hectares of land, HHI has emerged as one of the world’s top shipyards. It ranks fifth among the biggest firms in the industry with its exports boosting the country’s stature.

With a void to be filled, Manila is looking for an entity to replace the South Korean company. Among the outfits that have shown interest are those coming from Japan, Korea Turkey, Europe the US and China. Although the government is seeking a Filipino entity to assume the venture, it is the Chinese who are emerging as the leading player to acquire Hanjin’s stake.

This is where the troubling issue begins. Judging from Beijing’s aggressive approach in gobbling up territories in the South China Sea, several Philippine groups are concerned about giving the Chinese a vital presence which it can capitalize upon in the country. It is no secret that the Mainland is having a major territorial tussle with the Philippines at the Spratlys.

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Meanwhile, the Philippine Navy (PN) is also interested to take over the HHI undertaking. The Philippine President Rodrigo Duterte and Defense Secretary Delfin Lorenzana want to strengthen the sea-faring capability of the nation.

The task ahead for the PN is definitely immense. Considering that the institution is looking to modernize within five to 10 years, it does not have the needed resources to repel recent incursions into Philippine territory where the coastline range is 36,000 kilometers.

Because it is preoccupied with a weapons upgrade, venturing into the Subic shipyard will be a problem for the government.

 

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