US firm: More funds coming to Subic this year
Photo courtesy of Subic Bay Metropolitan Authority
MANILA, Philippines — After acquiring the modern shipyards in Subic Bay last year, the American equity firm Cerberus Global Investment pledged that it would increase its exposure in the country to help boost local employment and economic growth.
In a meeting with President Ferdinand Marcos Jr. on Friday, Cerberus executives, led by former US Vice President Dan Quayle, proposed to turn the Subic airport into a cargo and logistics hub.
Like Clark International Airport in Pampanga, Subic Bay International Airport was built by the United States for military use and was used as a cargo and logistics hub, particularly by FedEx, until 2009.
“We’re all very excited about this project. We have always tried to find a way to regain our position in shipbuilding. We were already No. 2 for a while,” Marcos said during the meeting.
The shipyard is now being managed by Agila Subic Compass, a management company formed in Holland last year by five Cerberus subsidiaries.
Article continues after this advertisementThe company said that another subsidiary, SubCom, engaged mainly in building and laying subsea communication cables, will also move to the facility in August, according to Press Secretary Cheloy Velicaria-Garafil.
Article continues after this advertisementThe move, she said, was expected to “create much-needed economic activity in Subic that could also benefit downstream industries in the area.”
At its peak, the local subsidiary of Korean shipbuilder Hanjin Heavy Industries and Construction, employed more than 19,000 blue-collar workers in its two modern dry docks, excluding those working at small and medium enterprises that mushroomed in Zambales and Bataan provinces.
Even the Bataan Export Processing Zone in Morong, Bataan, benefited from the shipbuilding industry in Subic.
Garafil said Cerberus has been employing different approaches to investment and wanted to ensure diverse economic activity by having multiple companies engaged in various businesses.
But Hanjin fell on hard times in 2017 and went bankrupt in 2019. With $412 million in unpaid debts to five Philippine banks, it was the biggest bankruptcy in the country, surpassing the $386-million debt default of Lehman Brothers in the country in 2008.
At least eight companies wanted to take over the facility through a deal with Hanjin’s creditors, but Hanjin went with Cerberus in a $300-million deal.
