The government will implement during the next five years its 'Filipino Investing in the Philippines' (FIP) program of promoting employment and upgrading the skills of workers in the local ship building and ship repair (SBSR) sector.

This aims to boost the sectors global competitiveness so it can attract more investments that will generate additional employment to help improve socio-economic conditions nationwide.

"Growth and development of this sector shall be a key component of governments continuing industrial development program," President Gloria Macapagal Arroyo said after establishing an ad hoc committee to prepare within this year a comprehensive development plan for the sector.

Aside from helping develop related industries like steel and marine engine manufacturing, the government expects the SBSR sectors improvement to further promote trade nationwide.

Ad hoc committee head Maritime Industry Authority (MARINA) estimated about 95 percent of the country's total cargo and services are transported by sea to major local commercial centres since the Philippines is an archipelago.

To help ensure FIPs implementation, Arroyo ordered government agencies concerned to help registered SBR companies avail of all fiscal and non-fiscal incentives permitted by law so each can extend free skills training to its existing and prospective workers.

These incentives include Board of Investments registration of these entities as preferred pioneer industry stakeholders.

"Entry and maintenance of foreign and local investment in the Philippine SBSR sector shall enjoy governments full support in view of its capability to generate employment opportunities, modernize the countrys industrial sector and improve productivity levels through new technological and managerial know-how," the President assured.

MARINA supervising shipping operations specialist Gil Samia said the agency registered as of 2006 a total 99 ship builders operating in Luzon (44), Cebu (15), Cotabato (19), Batangas (4), Zamboanga (5), Iloilo (8), Davao (2), Cagayan de Oro (1) and Legaspi (1).

He also reported MARINA registered last year a total 188 ship repairers nationwide.

Subject to certain conditions, Republic Act (RA) 9295 or the Domestic Shipping Development Act of 2004 provides for investors exemption from value-added tax on importation of capital equipment, machinery, spare parts, life-saving and navigational equipment, steel plates and other metal plates including marine-grade aluminum plates to be used in the construction, repair, renovation or alteration of any merchant marine vessel operated or to be operated for domestic trade.

This law also provides parameters for accelerated depreciation of fixed assets.

RA 9295 likewise said an investor's net operating loss, which wasnt previously offset as deduction from gross income, "shall be carried over as a deduction from gross income for the next three consecutive taxable years immediately following the year of such loss subject to pertinent provisions of the National Internal Revenue Code of 1997, as amended."

Last month, President Arroyo issued Executive Order (EO) 588 aimed at bolstering support for SBR since government planners identified such as among activities in which the country has natural and human resource advantage.

EO 588 also designated the National Economic and Development Authority, Philippine Economic Zone Authority, Philippine Coast Guard, Subic Bay Metropolitan Authority and the departments of finance, justice, trade, labor, public works and environment as ad hoc committee members.

MARINA cited high turnover of qualified manpower in local shipyards as among factors hindering growth of the Philippine SBSR sector.

Data from MARINA show the number of skilled Philippine SBSR workers plunged from 31,707 (1999) to 5,239 (2003) while total semi-skilled workers also dropped from 1,933 to 220 during the same reference years.

The agency attributed this to attractive foreign employment opportunities which drove many of these workers to leave the country.

"There was also a decline in ship building activities because financial constraints forced many ship owners to refrain from ordering newly constructed vessels," Samia said.

To curb exodus of skilled and semi-skilled manpower, Arroyo urged workers who availed of free training from their respective companies to abide by their contractual commitment of continuing employment with such.

"Overseas deployment or changes in employment in breach of contract by said workers shall be considered acts inimical and greatly prejudicial to national interest," she said.

(PNA)