Philippines defense minister says Manila considers blocking Chinese takeover of part of...

Philippines defense minister says Manila considers blocking Chinese takeover of part of Subic Bay

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Pentagon honor guard prepares for the Monday arrival of Philippines Secretary of National Defense Delfin Lorenzana. (Tom Squitieri/TMN)

WASHINGTON — The Philippines defense minister said Monday that his government will consider taking steps to ensure that China is not able to acquire part of Subic Bay, a vital port that would enhance Beijing’s grip on the South China Sea.

Philippines Secretary of National Defense Delfin Lorenzana voiced the concern ahead of his meeting Monday at the Pentagon with Acting Defense Secretary Patrick Shanahan.

“The Philippine government is ready to get in,” Lorenzana said, in response to a question from TMN. He said Manila is trying to find potential investors for part of Subic Bay where China hope to take control.

Chinese investors are in the forefront of efforts to buy the major shipyard in Subic Bay, now owned by a South Korea firm that is in default on its payments for the facility. Hanjin Heavy Industries and Construction Philippines declared bankruptcy in January after defaulting on more than $400 million in loans from Philippine banks, according to news reports. The company also is in debt for about $900 million to South Korean banks.

A takeover by Chinese financial entities would permit Chinese vessels and other apparatus to have a top-of-the-line port to patrol southern extremes and tighten their grip on passageways into the South China Sea.

China has regularly used its economic leverage to secure ports and other key infrastructure in other nations, such as in Sri Lanka in 2015. A move by China into Subic Bay deeply concerns Pentagon officials, they have said in prior interviews.

Lorenzana said two Chinese firms “are waiting in the wings” to take control of the part of Subic Bay now in economic uncertainty.

Lorenzana made it clear, in his Monday remarks, that he shared that concern as well as China’s continuing militarizing islands in the South China Sea, which flows to Philippines’ shores.

“It is very concerning,” he said of China’s South China Sea activities. “It is concerning to us because it is encroaching on our (territory).”

The Spratly and Paracel island chains in the South China Sea are the targets of Beijing’s militarization. The islands are in the middle of international shipping lanes, with an estimated $6 trillion in trade carried by ships each year through those waters. There are multiple territorial claims from Philippines, Malaysia, Brunei, Taiwan and Vietnam on the islands. China claims nearly all of the South China Sea, despite those counterclaims.

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