The President of Philippines, Rodrigo Duterte, is open to a government takeover of the recently-bankrupted Hanjin Heavy Industries and Construction Philippines (HHIC-Phil), according to Defense Secretary Delfin Lorenzana, driven mostly by concerns to save thousands of Filipino jobs.
Defense Secretary revealed Duterte’s position after two Chinese shipbuilders expressed their interest in buying the HHIC-Phil which raised concerns among Filipino officials that this would project China’s power deeper into the region.
The company declared bankruptcy on 8 January 2019. HHIC Phil owes $900 million to South Korean lenders and $400 million to five Philippine bank giants, including 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, making it the largest corporate bankruptcy in the Philippines’ history.
While expressing sympathy for Hanjin over its financial woes, Secretary Lorenzana said he found interesting Navy chief Vice Adm. Robert Empedrad’s idea of government taking over and managing the shipyard so the country can build its own vessels, philstar reported.
In 2006, Hanjin Heavy built the Subic shipyard in the Philippines. The company built small special ships at the Youngdo shipyard in Korea and mid-size and large merchant ships at the Subic shipyard.
However, the downturn of the global shipbuilding, which has vastly hit the industry, significantly affected HHIC-Phil as it saw newbuilding orders shrank since 2016. Hanjin Heavy filed for its Subic shipyard’s rehabilitation program with the Philippine court, in order to prevent the poor performance of the Philippine affiliate from affecting the parent company in South Korea.