Foreign shipbuilders are not bullish about setting up operations in the country because they lack confidence in the country’s business environment, according to the chief of the Maritime Industry Authority (Marina).

“Although there are many companies showing interest, when hearing from them, they said the Philippines’ business environment is not that encouraging, if I may say so. They are not that confident,” said Marina administrator Sonia Malaluan in an interview at the sidelines of the National Maritime Week Press Conference at the Philippine Ports Authority Office in Manila on Tuesday.

Malaluan said Denmark is among European countries showing interest in shipbuilding, ship repair and shipbreaking.

“The problem that foreign investors face in putting shipyards in the country right now is the Procurement Law. A provision in the current law says that before a project can be awarded, companies should have previous projects that are similar to the project that they want to invest in,” she said.

Marina data revealed that there are 408 registered shipyard facilities in the country, but 95 percent are limited to local repair services, while the remaining five percent are engaged in shipbuilding that is foreign-owned and catering to export markets.

For the international ship registry, the Marina administrator said only 95 Philippine-registered ships are operating under international trade, a very small number compared to other ASEAN countries.

This is the reason why Marina is backing the Philippine International Ship Registration Bill and the Philippine International Shipping Fiscal Incentives Bill, currently pending at the House of Representatives.

“The passage of the law would improve the number of Philippine-registered ships, hopefully, to carry our trade,” according to Malaluan.

Earlier, Marina underlined the necessity of pushing for legislation that will provide incentives to the overseas shipping sector to meet the demands of modern global shipping.

The proposed laws are deemed to introduce clear requirements and an efficient system for ship registration and reflagging, recognition of ship mortgages in line with international law, liability limitations for shipowners, seamless transition of inter-agency processes, and, most importantly, incentives that will reduce the cost of doing business, among others.

French shipbuilder OCEA earlier announced that it secured a 400 million-euro (P27 billion) contract with the Philippine government to support the maintenance and construction of patrol boats for the Philippine Coast Guard (PCG).

“Unfortunately, they cannot get a lot of locations up until now. They will construct the 83 and 53-meter boats of the PCG,” she said.

PCG Civil Relations commander Rear Admiral Teotimo Borja said part of the deal is for OCEA to either operate solely or in a joint venture with an existing local shipyard.

“This is to ensure that there will be a technology transfer, and also, our workforce will benefit from this. They will also be in charge of the maintenance of the ships that they will make,” Borja said.

Other foreign shipping players that have shipyard operations in the country are Japan’s Tsuneishi Heavy Industries, Inc., operating in Cebu under the Philippine Economic Zone Authority, and the returning HD Hyundai Heavy Industries Philippines Inc. in Subic.