SUBIC BAY FREEPORT—Thousands of workers of a Korean shipbuilder may lose their jobs because of the European financial crisis and the government’s failure to make good on its commitment to provide power incentives, a top official of the company said.
Taek Yun Yoo, general manager of the Hanjin Heavy Industries & Construction Co. Ltd.-Philippines Inc. (HHIC-Philippines), said the combination of a dearth of orders for huge ships in the international market and the Aquino administration’s failure to honor commitments made by the Philippine government to the Korean shipbuilder had “brought us to this situation where we may have to lose thousands of workers this year because our expenses have gone up (substantially).”
“We’ve been promised these incentives with other multinational companies by the previous administration, and that’s the only reason we chose to locate in this country instead of somewhere else,” Yoo said.
Under the administration of former President Arroyo, Hanjin, through subsidiary Phoenix Semiconductors, was given incentives under the 10-year Industry Competitiveness Fund (ICF) program.
The government granted the company and others, including Texas Instruments and Samsung, ICF subsidies to convince them to invest in the country.
In the case of Hanjin, under Executive Order No. 701 issued by Ms. Arroyo in 2008, National Power Corp. and National Transmission Corp. (Transco) provided discounted generation and transmission rates of $0.0491 per kilowatt-hour (kWh) within the first six years of its operations and $0.0600 per kWh from the seventh year until the 10th year of its shipyards in Subic and Mindanao.
“Should the prevailing industrial retail rates decrease to a level lower than the discounted rates agreed and granted by Napocor and Transco, the rates shall be correspondingly decreased to match the prevailing rates,” EO 701 provided.
Yoo said the discounted rate was granted by the Arroyo administration through Power Sector Assets and Liabilities Management Corp., with the Sual power plant in Pangasinan designated as the Korean shipbuilder’s power supplier.