Jose Antonio Cangco

The Philippines is a country comprising more than 7,100 islands and we do not even have our own shipbuilding industry.

This a bit strange when, after Indonesia, we have the longest coastline in the world, making sea vessels the cheapest form of transport to carry cargo and ferry passengers among our major islands. What is more strange is why the shipbuilding sector did not develop on our shores when we have the best reasons to do so. Did the Spaniards who were our conquerors for over 400 years, purposely kept the boat building activities restricted to prevent the Filipinos from island hopping, and so liberate islands in their quest for self-sovereignty?

That was more than four centuries ago, and over a hundred years have passed since we declared ourselves independent and what major manufacturing industry can we proudly call our very own today?

The major shipbuilding players in the country are foreign owned. In 2009, the first oil tanker built in the Philippines was launched by Hanjin in Subic Bay. Its facilities in Subic Bay is reputedly considered as the fourth largest ship facility in the world.

Other players are Singaporeís Keppel with shipyards in Subic, Batangas and Cebu, and Japanís Tsuneishi operating in Cebu. Two local shipbuilders of note are the Bataan based Herma shipyard and Aboitiz-owned FBMA Marines, Inc., although these are far from the league of the commercial giants.

Shipyards in countries around the region are teeming with activity, the Philippine government should promote a Filipino owned shipbuilding industry. From Korea and Japan, down to China, Taiwan, Honk Kong, and tiny Singapore, their shipyards are humming with activities. Malaysia, too, is going along with the tide of potential growth. As of December 2009, it was ranked no. 21 among 35 nations in terms of deadweight tonnage of commercial vessels, and owns or operates the largest fleet of LNG tankers in the world. On the other hand, the shipping industry may not be getting all the attention it needs from the Indonesian government, but the country is already successfully flying with a major manufacturing sector: aviation. The IPTN now known as the Indonesian Aerospace designs and builds aircrafts, and together with South Korea will build fighter jets in 2012.

Our shipbuilding sector is clearly in the hands of foreigners to whom we provide cheap labor. With cheap labor, liberalized importation of raw materials, and tax free economic zones foreign-owned shipbuilders are doing well in the country, providing employment to the locals.

All of the above are clear signals that we should be getting serious in taking the first step in trying out to be a global player in even just one area. There should be a ready market because as of now, besides our fledging navyís need to modernize its fleet, a big bulk of government exports and imports are carried on foreign flag ships.

The efforts of the local private sector in going against international giants in the shipbuilding sector are commendable but more should be done. Under President Gloria Macapagal-Arroyo, there was a move to draw up a five year plan to develop the shipbuilding sector through government and private sector collaboration. Many however are doubtful that shipbuilding which is 100 percent Filipino owned will be able to get off the dock and sail the high seas.

Doubting Thomases never built bridges. Now is a good time to start, plan and get serious. A big drawback we as a people have is we do not have the vision to plan ahead for ten or twenty years. Perhaps, by having a major manufacturing industry, we can catch up with our neighbors who are (with less population) better off, and change from being known as a consumer and retail society to a manufacturing country, although not easily attainable within the next five years or so.

How do we go about establishing a truly Filipino shipbuilding industry? There are two stages: planning and implementation. Planning includes 1) feasibility studies to cover funding, market and demand; sources of technology and materials, and identification of partners from the private sector; and 2) introduction and passing of the necessary legislation and local laws to support the venture.

The first stage is for Congress to create a commission to study the viability of a 100 percent Filipino owned shipyard in the ranks of the major leagues. The commission that is in charge of planning shall draw up realistic objectives which are practical, attainable and materialistically possible.

The responsibilities of the commission include identification of sources of funds, acquisition and construction of facilities, types or class of ships to be built during the early years of operation, etc. until the stage when the yard is fully capable of constructing tankers and ocean going vessels.

After the commission shall have done its task, then a national corporation composed of both the private (Filipino) and governments sectors shall take over actual operations and production. The second stage is to implement the plans drawn-up by the commission. In fact, it is highly recommendable that the proposed facility fabricate small sea vessels that can be used in domestic waters during the initial years of operation before going into the final phase of constructing international cargo ships and the like. By building smaller ships first, we will be testing the waters, and at the same time, gaining experience.

Yes, we may not be able to build a ship that is completely Filipino outfitted because it has to have modern and advanced technological navigational aids which we do not manufacture, but this is not a valid reason that we cannot construct most of the ship.

If we have the vision, then we must build ships.

Copyright by the Author
(Published in the Philippine Panorama, November 14, 2010)

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