24 June 2014

PH becoming Asia’s shipbuilding, repair hub

The government has been preparing to become a hub for shipbuilding and ship repair in the Asian region.

Maritime Industry Authority (MARINA) deputy administrator for operations Atty. Gloria Victoria-Bañas told exhbitors of the first international shipbuilding and offshore equipment and technology exhibit at SMX Convention Center that MARINA is preparing the country to become a major center for ship building and ship repair.

Bañas noted that there has been an increase in foreign investments on shipbuilding and ship repair in the country.

“In 2013, the Philippines was ranked as the fifth world’s largest shipbuilding country after China, Japan, Korea and Brazil, as more local shipyards are building more ships of larger tonnage capabilities like bulk carriers, container ships and passenger ferries, particularly Tsuneishi Heavy Industries, Inc. (THICI), Hanjin Heavy Industries Corporation Philippines and Keppel Philippines Marine, Inc., which cater to the export market,” said Bañas.

Bañas said that while the local shipyards is focused primarily on the ship repair of the country’s domestic fleet, ship building projects are limited to small ships and motor bancas.

There are 121 licensed shipyards, eight facilities for the construction and repair of big ships and 14 other shipyards for medium-sized ships and 99 yards to service smaller ships.

Banas noted that before the emergence of Japanese and Korean shipyards in the country, European yards dominated the world’s shipbuilding industry.

“While shipbuilding still exists in Europe, they are now focusing more on specialized ships. European yards had conceded that they could not compete with the low labor, materials and land costs of Asian countries,” Banas said.

“As a result, the shipbuilding industry of developing countries such as the Philippines benefitted with such development,” said Banas.

To encourage more local and foreign investors, MARINA offers incentives for shipbuilding and ship repair projects under Republic Act 9295.

These incentives include exemption from value-added tax on the importation of capital equipment, machinery, spare parts, life-saving and navigational equipment and steel plates; net operating loss carry-over and accelerated depreciation.

Under the government’s Investment Priority Plan (IPP), investors in shipbuilding and ship repair are exempted from the payment of imported duties and taxes for the importation of equipment and parts needed for their operations and modernization and income tax holidays for shipyard operators.

Banas said there are other incentive schemes that investors can avail from the economic zones and free port zones such as the Subic Bay Metropolitan Authority, Cagayan Export Processing Zone Authority, Aurora Pacific Ecozone, Zamboanga City Special Economic Authority and the Maritime Industrial Park at PHIVIDEC Industrial Estate in Misamis Oriental.

“I am confident that the needed speed and momentum can be created to further propel the shipbuilding and ship repair industry way beyond global competitiveness,” Banas added.

She also commended the shipbuilding industry exhibit organizer, Fireworks Philippines of the Fireworks Trade Media Group for holding the event which showcased the latest trends and developments in the maritime, offshore and shipbuilding industry and its ancillary industry that serves as a meeting place for international maritime, offshore and shipbuilding companies and association here in Manila.

“It is remarkable to know that the exhibition does not only show the latest products and techniques but it also serves as a venue for the exchange of ideas to improve the current shipbuilding technology and equipment and help maintain the Philippine current status as the world’s fifth largest shipbuilding industry in terms of order book by country,” said Banas. (Edu Lopez, Manila Bulletin)

PHOTO FILE: Hanjin Shipyard in Subic Bay Freeport