The Philippines possesses an unusual opportunity to leverage its location, experienced labor force, and growing connections Japan to develop a more robust maritime manufacturing sector, however experts state that Manila's efforts to position shipbuilding as a key industry will depend on whether new investments lead to sustainable capabilities.
President Ferdinand Marcos Jnr provided a tangible push on June 3 after he approved the expansion of 64 hectares (158 acres) to the West Cebu Industrial Park (WCIP), one of the nation's major centers for shipbuilding and large-scale industries.
The declaration expanded the special economic zone in Balamban, located along Cebu's western coastline, to over 600 hectares. This marked Marcos' third growth initiative for the industrial area; another directive from last year involved seven plots of land within the same town.
The growth occurred just after Marcos' official trip to Japan, during which he held discussions with representatives from Tsuneishi Group Corporation, a Japanese company involved in ship construction, maritime transport, energy, and various associated sectors.
The conversations centered around Tsuneishi's current and future investments in expanding shipbuilding operations, adopting eco-friendly marine technologies, and developing cutting-edge maritime production facilities in the Philippines.
These initiatives involve enlarging Tsuneishi's shipbuilding infrastructure within the WCIP and advancing the creation of eco-conscious new generation ships.
The WCIP, alternatively called West Cebu Estate, was founded in 1992 and accommodates 11 facilities belonging to mid-to-heavy scale industries which benefit from governmental tax advantages.
The ecological zone is managed by Cebu Industrial Park Developers Inc., which is a partnership of the Aboitiz Group and Tsuneishi.
"An extra 64 hectares will be allocated for fostering the ongoing expansion of the shipbuilding sector inside West Cebu Estate, enhancing the estate’s combined maritime and industrial system," Aboitiz said to This Week in Asia.
The company stated that the industrial park hired over 14,000 trained Filipino employees for its mid-to-heavy industry activities.
Chester Cabalza, who established and leads the International Development and Security Cooperation think tank based in Manila, stated that the facility's highly anticipated growth aims to solidify the nation among the world's leading five shipbuilding nations, increase its employee base twofold, and reduce the departure of trained professionals due to emigration.
By increasing the capabilities of heavy industries in the nation's shipbuilding hub, it boosts the manufacturing and service sectors," Cabalza stated, noting that its emphasis on eco-friendly technologies may transform Cebu into a "self-reliant economic powerhouse.
Mark Manantan, a researcher at La Trobe University's Centre for Global Security, praised the Marcos government's initiatives to enhance collaboration with key allies such as Japan and South Korea.
"Such an anchor can ensure organizational stability, ongoing political drive, and cooperation across different sectors involving government bodies, industries, as well as academic research organizations both inside and outside the Philippines," Manantan said to This Week in Asia.
Although defense and security measures receive attention through boosting the shipbuilding sector, Manantan noted that the more significant advantages involve advancing the country's maritime industry to address challenges related to the blue economy, oceanic and biological diversity, counterterrorism, piracy, and particularly, humanitarian and disaster relief efforts.
During November, Franz-Michael Skjold Mellbin, the Danish ambassador to the Philippines, stated that Manila has the capacity to create 100,000 specialized job opportunities within its shipbuilding sector, as Danish investors show interest in investing, according to reports from the local media source BusinessWorld.
Mellbin further noted that the Philippines might act as another option for shipbuilding instead of China, thanks to its experienced labor force and strategic position.
However, for Manantan, portraying the nation's shipbuilding sector as rivaling China is considered "unwise," since the Philippines lacks the capacity to match China in size and financial resources.
"Expanding the focus from major power rivalry to an approach aligned with the Philippines' national interests could lead to better results for its economic growth and technological progress," Manantan stated.
As artificial intelligence advances, the growth stemming from the shipbuilding sector could be significant, encompassing the creation of automated vessels that function both on and beneath the water surface.
Japan and other players
Experts point out that the hub's development further highlights Japan's position as a major contributor to the advancement of the Philippines' ship construction and marine sector.
Manantan pointed out that relations between the two nations have stepped into "a New Golden Era 2.0," with Marcos' latest official trip emphasizing the long-standing collaboration between the countries because of common strategic and economic interests.
He also saw it as a chance for the Philippines to leverage connections within the broader network of U.S. allies and partners, such as South Korea and Australia, in order to advance its strategic industrial plan.
Cabalza stated that upgrading relations to a full-fledged strategic alliance reflected strong confidence in naval security and defense collaboration, leading to economic and marine growth in the Philippines.
Boosting the shipbuilding sector may further enhance the Philippines' independent defense strategy, according to experts, although they emphasized that systemic challenges must be addressed.
"Constructing vessels within the country safeguards military acquisitions against global supply chain interruptions. For this reason, regional shipyards produce defense equipment specifically designed to meet the distinct requirements of the nation's island geography," Cabalza stated.
Advanced capabilities and favorable geographical features exist, yet the Philippines faces significant structural challenges. Manila needs to pass the Shipbuilding and Ship Repair Development Act to expedite land leasing processes and provide more flexible financing options for local shipbuilders. Synchronizing commercial shipyard production with the updated Self-Reliant Defense Policy ensures a stable market within the country’s own vessel manufacturing sector.
Manantan stated that the center offered a chance for the Philippines.
"It safeguards the nation's territorial unity and independence from forceful interventions, while simultaneously enhancing its distinct role as a key member within U.S. alliances and partnerships to gain advanced abilities and technological expertise for developing its own defense sector," he stated.
Nevertheless, Manila had to tackle problems like aging infrastructure and insufficient distribution networks, he warned.
"The nation should also maintain an export-driven strategy for foreign-owned shipyards but shift towards more locally-based maintenance, repair, and service operations, with the long-term aim of building its own vessels," he stated.
The Marcos government encounters an additional hurdle: guaranteeing that the hub becomes reality prior to the 2028 presidential vote.
"In 2028, what occurs will undoubtedly play a crucial role in shaping future consistency. This situation isn’t exclusive to the current leadership," Manantan stated, noting that earlier administrations have also experienced complete shifts in their policy approaches.
Therefore, I believe whether these strategic collaborations truly materialize largely hinges on how effectively the Marcos government adopts an integrated strategy across all levels—governmental, political, and societal. This represents a rare chance for the Philippines that must not be missed, considering the present enthusiasm among numerous investors looking to put their resources into the country.
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