The Philippines government is bidding for a US$1 billion loan from the Japan Bank For International Cooperation (JBIC) to speed up modernisation of the country's shipping industry, reported the Manila Bulletin.

Trade and Industry Secretary Peter Favila said the project would be implemented by the National Maritime Equity Corp. (NMEC), a subsidiary of the state-owned investment-arm, the National Development Co.

A study by the Japan International Cooperation Agency (JICA) revealed that local shipping operators prefer to purchase imported second-hand vessels since prices of locally-built ships are too high.

"Despite low labour cost, locally built vessels are more expensive than second-hand imported vessels," the JICA said in its study.