The Philippine unit of South Korean shipbuilder Hanjin early this week filed for court rehabilitation proceedings as it struggles to pay $412 million in combined loans from five Philippine banks. Most of the money was reportedly lent without collateral protection.
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Duterte open to government takeover of Hanjin facility
Patricia Lourdes Viray (Philstar.com) - January 16, 2019 - 2:57pm

MANILA, Philippines — President Rodrigo Duterte was "very receptive" of the idea that the government may control of Hanjin Philippines in Subic, Defense Secretary Delfin Lorenzana said Wednesday.

Hanjin Philippines, a subsidiary of South Korean shipbuilder Hanjin Heavy Industries and Construction Co. Ltd., recently declared bankruptcy.

"While we sympathize with the financial woes of Hanjin, we are excited by this development because we see the possibility of having our own shipbuilding capacity in the Philippines especially large ships like what's being built in the Hanjin shipyard in Subic," Lorenzana told the Senate.

Lorenzana had suggested to the president the government takeover of the facility in Subic and to turn it over to the Philippine Navy for management.

The Defense chief noted that Finance Secretary Carlos Dominguez III was also thinking of ways on how local banks could recoup their investment amounting to $430 million.

According to Lorenzana, the situation would be an opportunity for the military as it usually orders ships abroad. If the proposal is approved, the government can build the ships in the country instead of purchasing from other countries.

"The Coast Guard is also in need of lots of ships... The government can be a minority owner and the majority owner would a civilian company, a Philippine company," Lorenzana said.

Sen. Panfilo Lacson also suggested for the government to take over Hanjin and then hold a bidding among private entities for possible partners of the Philippine Navy.

The Philippine Navy, meanwhile, admitted that they cannot fully take over the shipbuilding facility in Subic.

"We cannot take over totaally the entire Hanjin but a portion probably the Navy can take over," a Philippine Navy official said.

On the other hand, former Philippine Navy Chief Vice Adm. Alexander Pama earlier expressed alarm over the possible Chinese takeover of Hanjin Phillippines.

This follows reports that two Chinese shipbuilding firms are interested to take control over the operations of the shipbuilding facility in Subic.

Rep. Gary Alejano (Magdalo Party-list) shared the same sentiments with Pama, pointing out the facility's geographic location and China's history of illegal occupation of Manila-claimed features.

"The Hanjin shipyard in Subic is facing the West Philippine Sea which could provide China easier access in our territory. Their resupply missions for their troops in reclaimed islands would be faster and monitoring of fishing activity in our waters would be less challenging," Alejano said in a statement.

The former Marine officer also warned that China may use the facility for intelligence gathering and monitoring of activitiy in Philippine waters.

"I urge the government to seriously consider the impact of allowing Chinese firms to take over the largest shipyard in our country. This seemingly commercial venture could be taken advantage to pursue the interests of China in the West Philippine Sea," Alejano said.

DELFIN LORENZANA HANJIN PHILIPPINES RODRIGO DUTERTE
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