BELOW THE LINE
By JOSE ABETÓ ZAIDE
A bone-in-the-throat for the Duterte administration in the New Year 2019 is what to do with the Hanjin Heavy Industries and Construction Philippines (HHICP).
Off to a great start, it put the Philippines on the map with the world’s 4th largest shipyard. Until, like the old song goes, it went Puff, the Magic Dragon! Dream project turned nightmare: HHICP, the biggest foreign investor at Subic Bay Freeport Zone, became the biggest corporate bankruptcy to hit the Philippines since Dewey Dee. On 8 January 2019, it filed for voluntary rehabilitation with the RTC because it could no longer service its debt – $412 million owed to a consortium of Philippine banks, (on top of another $900 million owed to suppliers and other creditors in South Korea, its home base). Bangko Sentral ng Pilipinas (BSP) had to stem repercussion from the Hanjin fiasco.
Whistling in the dark, BSP said, “the loan exposure represents only 0.24% of total loans of the banking system and 2.49% of the foreign currency loans of foreign currency deposit units (FCDU).” How much we can recover from the assets of this epic bankruptcy, only the bankers know the unexpurgated truth.
BTW, another casualty of this debacle are thousands of Pinoys who lost their jobs. At the peak of operation, Hanjin employed more than 30,000 highly skilled personnel. It is down to 3,000, soon to downsize to only 300 to operate its ship repair facility. Hanjin promised to throw small bones – one-month pay for every year of service.
There are solutions proffered, from the sublime to a band aid.
- Defense Secretary Delfin Lorenzana said government can take minority stake in the HHICP and bid out the majority stake to interested parties. The Philippine Navy is building up its fleet with 26 vessels in the next 10 years. Devoutly to be wished; but a long and future thing.
- Our taipans have been approached; but most are landlubbers and predictably did not respond to the challenge.
- The Chinese try not to show too much eagerness. Secretary Salvador Panelo sees no problem with a Chinese firm with proven track record taking over the debt-saddled Hanjin Philippines. (But a former Navy official sees prudence as the better part of valor: Do you let the fox inside the poultry?)
- Japan, which has an extensive auxiliary maritime fleet, may find it congruent to beef up our maritime presence. Norway, which signs on Filipino seafarers, would also be a logical partner.
Neither to panic nor bury head in the sand. because a frantic solution may only lead us throwing good money after bad.
Oscar Violago, a man of impossible dreams, sees in our predicament, an opportunity — to upgrade Philippine bottoms! Filipinos are natural seafarers; but, with the exception of the Fabrelle Group of Companies which has over 100 deep sea fishing vessels, our ships are small and hug the shore. In contrast, our neighbor Taiwan has about 2,000 deep-sea fishing vessels. If President Duterte were to commit to the HHICP a national program to upgrade our fishing fleet, our deep-sea fishermen would-be pulling in bountiful harvests.
Violago-points to the example of our pineapple industry, which for many years left the field to pineapple multinationals Del Monte and Dole. It took a local consortium to provide technical know-how to grow the pineapple extensively and turn our subsistence farmers into extensive landholding producers.
Perhaps, thanks to our typhoon mentality, it takes a crisis for us to have the gumption to get up and go, or for our leaders to muster the courage to turn adversity to advantage.
POSTSCRIPT. Last Saturday evening, 26 January, cognoscenti and dilettantes were treated to Dr. Raul Sunico performing four Sergei Rachmaninoff piano concertos with the Philippine Philharmonic Orchestra under conductors Yoshikazu Fukumura and Herminigildo Ranera at the Cultural Center of the Philippines. Sunico is one rara avis with prodigious memory who plays without notes. Unlike the Bard who never repeats, Sunico said in his wry self-effacing tenor, “I had done this before [four Rachmaninoff concertos] in September, 2003, also at the CCP with the PPO under Ranera. That time, my Juilliard School alma mater wrote to congratulate me for the performance. Perhaps nobody had done that before. Now,15 years later, I don’t know if somebody has lost his mind to commit it again.”
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