In an interview, Socioeconomic Planning Secretary Romulo L. Neri said it makes sense for the country to be a major player in the industry due to the existence of a huge shipyard in Cebu. The shipyard currently has 4,000 employees and there are plans of expansion to almost double the capacity.
Aside from Cebu, Subic, a base for South Korean shipping giant Hanjin, likewise is a major shipping hub, Neri said.
Neri, concurrent director-general of the National Economic and Development Authority (NEDA), has proposed jumpstarting the industry by buying ships in Japan and then leasing them. "That would be financed by JBIC (Japan Bank for International Cooperation)," he explained.
The Japanese government is poised to lend an additional $1 billion to the Philippines for the modernization of its maritime industry. However, Neri earlier said the Japanese benefactors have been displeased with the way an initial P10 billion loan for the improvement of the nautical highway were being disbursed.
Neri said the Japan International Cooperation Agency (JICA) was disappointed with the way the Development Bank of the Philippines (DBP) handled the initial loan released in 1999.
"The loans are not moving," Neri said, referring to the money loaned through the Domestic Shipping Modernization Program I, which DBP handled. However, Neri cleared that this was not the fault of the state-run bank.
"It’s the law and DBP is constrained by it," he explained.
JICA said the term loan under DBP required an 80 percent loan value and 50 percent chattel mortgage collateral value of the vessel which became a big burden for private shipping companies to avail.
"The program was unable to achieve its objectives," JICA said.
To address this problem, JICA proposed that the local government create the National Maritime Leasing Corp. (NMLC). Now, instead of DBP handling the shipping modernization program, the NMLC will be in charge of financing acquisition of modern vessels to be leased to qualified operators under the Finance Lease Program.
In turn, the Japanese government, through JICA, will coordinate with NMLC to conduct technical assistance to construct brand new vessels in Philippine shipyards which will create a healthy, robust, shipbuilding sector of the local maritime industry.