The pandemic was really a disruptive game-changer. Even before the pandemic sent home most of our seafarers in 2020; their number has been dwindling the years prior. From close to 470,000 in 2019 it dropped 54% in 2020 to about 217,000. Deployment in 2018 dropped by more than 100,000. While the number of Philippine seafarers is dwindling, the number of seafarers coming from India is increasing and that is no small matter. The Philippines has been very much aware of this competition coming from India in that they have been aiming to have 20% of their population to be deployed as seafarers. Many of our seafarers have lost their jobs to Indian, Indonesian, Eastern European, and even Myanmar seafarers for so many reasons including that Filipinos are getting to be expensive.
Here is an excerpt from a retired seafarer who runs a Manning agency: “Owners are shifting to other supplying countries like Myanmar, Indonesia, India and other Eastern European countries due to economic reasons. But we assumed that there are various reasons and/or due to the increasing legal cost in employing Filipino crew as complained by the Protection and Indemnity P&I Insurance and owners,” said Morales, a retired captain who oversees several manning agencies.
Filipino rates for skilled seafarers are estimated to cost $1,000 each per month, compared with $600 to $800 per month in Indonesia. Morales also said the new Social Security System (SSS) Law would give ship-owners more reason to abandon the country. “In this new SSS Law, manning agents are considered employers, jointly and solely liable with criminal liability in the event its obligation to this law is violated. The manning industry will eventually die in the near future,” Morales claimed. Our seafarers contribute 22% of our OFW remittances. A seaman remits 80% of his salary leaving just a little for himself and yet reports show they are short-changed even further.
The Seafarer Training Industry and the EMSA Audit
The Philippines has a huge privately-run seafarer training industry that churns out 25,000 to 30,000 graduates of whom only 20% make it to sea and serve onboard an international vessel. There is also the standing warning from the EU –should we not pass the safety standards set, our seafarers will be banned in the EU.
EMSA’s requirement to limit the number of cadets doing OBT
I have written about the safety of lives at sea (SOLAS). But one of the recommendations or directives of the EU is to limit the cadet’s onboard training. Shipboard training has always been an issue due to the lack of domestic ships that can be used for training.
According to one report: It would be the end of the line for many maritime schools in the country should the proposed corrective actions presented during the national workshop by the Maritime Industry Authority (MARINA) be implemented next school year, Sabino Czar Manglicmot, 2nd president of the Philippine Association of Maritime Institutions (PAMI) warned.
It was disclosed on the workshop’s first day that EMSA noted significant numbers of cadets on ships. “The team found cases in which 11, 16 or even 37 deck cadets were on board those ships, on which there were only two deck officers and the master,” the EMSA Report said.
This practice of having more than 10 cadets undergoing OBT (Onboard Training) on a ship in the inter-island trade has become common in recent years as the sector’s answer to severe lack of berths for students who have completed their academic requirements and, thus, are eligible to proceed to shipboard training.
Another issue is that our domestic fleet does not lack in number of ships, but we lack ships that weigh at least 500 tons. For the period of 2011-2015, 40% of domestic cargo ships weighed less than 500 tons. If some lower their tonnage to lower berthing fees, that would be another issue. MARINA must strictly
implement re-admeasurements (tonnage measurement).
Also, the majority of our fleet is comprised of fishing vessels said to be unsuitable for onboard training. Since most of our fishing vessels are not used to catch fish but only carry the catch of the sea, maybe they could be reclassified as cargo vessels.
Whether it is true or not that domestic ship-owners reduce the tonnage of a vessel to pay lesser fees, resulting in a lack of available vessels that can provide OBT, seafarer training facilities, many of which are ill-equipped, produce too many graduates. This has been the recommendation of EMSA (European Maritime Safety Agency Audit) since 2006, but we have yet to comply.
EMSA Audit
Much has been reported by EMSA about how Maritime Schools need to shape up our Maritime training to comply with STCW (Standards of Training, Certification, and Watchkeeping) or shape out.
The Philippines was first inspected and re-assessed in 2006 when it was found not meeting the STCW requirements. The final audit conducted by the EMSA lasted until March 2020. During this period, EMSA conducted several inspections, such as visits to the Maritime Industry Authority (MARINA), Commission on Higher Education (CHED), three assessment centers, and 9 maritime higher education institutions (MHEIs) at Manila, Zambales, Cebu, Tagbilaran, and Iloilo areas.
“The inspections are aimed at verification of the system in place and include visits to the maritime administrations and maritime education and training institutions. In a country such as the Philippines, the number of these institutions is around 100, consequently, a representative sample is chosen” said the EU to Manila Bulletin.
In the previous EMSA audits, it was reported that the Filipino seafarers did not meet the STCW requirements. In fact, the March 2017 audit stated there were 42 areas of concern found. The Philippine authorities were required to submit 3 separate reports showing how these had been addressed.
In light of the situation, the Maritime Industry Authority (MARINA) back in November 2019 submitted the required documents in order to show proof of compliance to EMSA on the country’s maritime schools and training facilities standards and for implementing reforms under Executive Order 63. However, should the Philippines fail during the final audit, more than 30,000 of the region’s seafarers will be banned to service onboard European-flagged vessels.
European Commission’s Assessment
EU Ambassador to Manila Luc Véron said the European Commission would conduct an assessment for six months after it received the 2020 inspection report of the European Maritime Safety Agency (EMSA) on March 1.
“The European Commission will now undertake the assessment. This starts a six-month formal process that will be concluded by an EU decision on extending or terminating the recognition. Such a decision will be consulted with the EU Member States.”
More Improvements Coming Soon
The Philippine Association of Maritime Institutions (PAMI), unfazed by the challenges brought about by the Covid-19 pandemic, remains naively optimistic that the state of affairs in the maritime education sector will improve in the coming days.
PAMI’s confidence is founded on the goodwill established among the various stakeholders of maritime education, both in government and the industry. The regular consultations initiated by the Maritime Industry Authority (MARINA), the Commission on Higher Education (CHED), Congress, PAMI, and other industry stakeholders demonstrate their earnest efforts to cooperate in resolving the problems confronting the sector. There is an obvious departure from the approach of drawing a clear barrier between the regulator and the regulated community which hardly resolved outstanding industry issues.
PAMI’s bringing together MARINA, the MARINO Party-list, the Joint Manning Group (JMG) and the Philippine Inter-island Shipping Association (PISA) was but one of the many initiatives where these stakeholders tried to put together their thoughts on the challenges confronting Philippine maritime education, not limited to those resulting out of the pandemic, but more so to provide valuable inputs for strategic planning.
MARINA Administrator, RADM Robert Empedrad confirmed his commitment to continuously engage the stakeholders as the agency deals with the immediate concerns of the country’s maritime education. Known for his disposition to listen, Administrator Empedrad has gained the respect and acknowledgment of many in the maritime education sector. From one who once worked at MARINA, he revived in me the pride of having a Head of an agency who values his staff and personnel through generous acknowledgment of their contribution. Yet, he affirms his uncompromising policy of zero-tolerance on corruption.
MARINO Party-list represented in the Convention by Cong. Macnel Lusotan is PAMI’s partner in the House of Representatives. Cong. Lusotan gave updates on the status of House Bill No. 272 on the Magna Carta for Filipino Seafarers which was approved by the Lower House and subsequently endorsed to the Senate in January 2021. Although HB No. 272 has deleted many extraneous provisions in the previously drafted bill, the provision requiring maritime higher education institutions to demonstrate that over the last three years, at least 60% of their maritime students who were able to secure cadet berths have been ominously retained. Cong. Lusotan cited a draft bill on Maritime Education Act which the MARINO Party-list will sponsor in the Lower House. “Without me concurring with legislating the carrying capacity for cadet berths, the MARINO Party-list could help by calling for the deletion of the aforementioned provision of HB No. 272, possibly during the bicameral meeting on the Magna Carta for Filipino Seafarers and instead propose the consideration of said provision in the discussions of the draft Maritime Education Act,” Cong. Lusotan said.
Insights shared by JMG’s Mr. Eric Marquez and PISA’s Atty. Peter Aguilar were enlightening as well as encouraging even as the shipping and manning sectors are coping with the disruption created by the pandemic. They clearly articulated industry support for expanding the capacity for cadet berths and cited the current circumstances obtained in both international and domestic shipping which gives the maritime education sector in general, and PAMI in particular, valuable advice when dealing with the issue of onboard training.
At the Senate, it is reassuring as Senator Christopher Lawrence Go expressed his support for the maritime industry in his opening address to the PAMI Convention. Indeed, the PAMI annual convention is not just an ordinary event for the Association member-institutions; it is an event that allowed PAMI to have a meaningful dialogue with their partners in government and the private sector. It is good that there is a roadmap for our seafarers, but there is a lot of work to be done as we are a Maritime Nation. But while we are trying our best at everything for the green economy, we must not forget the blue economy.
It is true that we need to up the ante in Maritime education, not only because of seafaring but more so because we are a maritime nation with a formidable population, with a rich potential for maritime human resources in various fields.
The naval architecture course has a few takers, but the few who take it excel abroad like Darwin Morano, a Filipino Naval Architect recognized for his design in building UAE’s patrol craft.
In my article about Amending the National Defense Act: Philippine Navy, I talked about re-channeling our resources from the Philippine Army to other branches like the PAF and PN. We keep talking about a Self-Reliant Defense Posture yet we still import ships, and just about everything.
We can build our own ships, but we cannot even produce license plates and Protective Equipment because of the track record requirement of the procurement law.
To be specific, the Eligibility Criterion is under Section 23.11.1 (2) of the Implementing Rules and Regulations Part-A (IRR-A) of Republic Act 9184 (R.A. 9184). But with the ongoing controversy concerning a favored firm that came out of nowhere winning a bid despite established competitors. Although having an established bidder has more benefits, the concern is it can become a barrier to new entrants who would consequently have to resort to the “who you know in business” strategy to move forward.
Once our manufacturing sector vastly improves we would no longer be a breakdown maintenance nation which means a lack of preventive maintenance, and we repair only when it is broken, believing more in the logic behind “Why fix something if it ain’t broke?” than on necessary preventive maintenance.
That is the sad plight of Philippine maintenance culture in general. I am thinking if we should be proud if we managed to keep WW2 warships and boats afloat. Aside from the track record issues, there are a lot more:
Dwindling Workforce in Shipyards
ShAP (Shipping Association of the Philippines) highlights the dwindling workforce at the shipyards. Careers in artisanal “trades” have declined as “call center” and other white-collar jobs become more popular. ShAP’s presentation further notes there is a dearth of naval architects and marine engineers (the latter is not to be confused with the merchant marine engineers) to fill the local demand for their expertise. Overseas employment opportunities beckon as an attractive option, although some of the licensed professionals and skilled workers have stayed to work in local shipyards and help construct those “proudly Philippine built ships.”
Aside from efforts of keeping shipyard manpower in the country, ShAP expresses optimism on the opportunity offered by the K-12 curriculum in producing a bigger number of the young job-ready labor force that could work at the shipyard. However, attracting these high-school graduates will largely depend on generating their interest in building a career at a shipyard. Application of technology may be a come-on; still, employment opportunities for shipyard workers are hardly known or advertised. Career orientation events for high school graduating classes usually do not mention naval architecture nor are information flyers citing anecdotal successes relating to the profession distributed. Moreover, activities at the shipyard are hardly considered newsworthy, except when accidents occur or occasionally, a ship is launched at a Philippine shipyard. ShAP must realize there is a need to be more visible. Make the wider population know that opportunities abound at the shipyards!
More Challenges
Aside from insufficient manpower, Philippine shipyards are struggling to overcome bigger issues and challenges relating to materials, machinery, methods, and money, factors that determine a shipyard’s competitiveness. Steel constitutes the most part of a ship’s structure and is sourced from overseas; so are ship engines, propellers, and generators. High handling costs, duties, and taxes imposed on these materials add to the cost of building ships locally. On the other hand, tax incentives are extended to those who import ships, thus making locally-built ships lose out even in the inter-island shipping market. A case in point is Republic Act 9337 that amended the Internal Revenue Code (IRC) of 1997 and exempts domestic shipowners from paying value-added tax on the importation of vessels, engines, supplies, and equipment, a privilege not enjoyed by those who construct ships for domestic shipping. Closely reading Section 109 (S) of the IRC may provide a different construction of what the law provides, although generally tax legislation is to be strictly interpreted in favor of the taxing authority and that exactly was done.
Ship-owners are expected to source their ships where they can get the best bargain. Understandably linked to this and which ShAP recognizes, is the limited financial capacity of its customers –the ship-owners. It is therefore not surprising for shipbuilders to make an appeal on behalf of local ship-owners for the expansion of the country’s ship financing facilities.
For a country that professes to be a maritime nation, one expects to see a robust and flourishing shipbuilding sector. This does not seem so. Second-hand ships acquired from Asian neighbors plying in domestic waters continue to thrive, never mind if these are rendered unseaworthy as these undergo reconfiguration or are allowed to serve in routes different from their intended areas of operation, i.e., in calm seas or protected waters. Thus, issues of unseaworthy ships pop up and the use of imported second-hand ships re-surface whenever maritime casualties occur. Many fact-finding inquiries were conducted for the many maritime accidents. Yet capacitating local shipyards to build fit-for-purpose ships for inter-island shipping was rarely cited as an option to enhance maritime safety.
The issues and challenges confronting the shipbuilding sector are not new. One can only surmise government recognized the important role of the sector in realizing the country’s aspiration of socio-economic development as to identify it as one major component of the Philippine maritime industry. Such was clearly stipulated under Presidential Decree 474 that created the Maritime Industry Authority (MARINA). After four decades, the same problems appear although articulated in different formulations.
One can sense from the challenge that ShAP throws to the government and concerned stakeholders a feeling of exasperation, but the association is not giving up on convincing the government to take the side of Filipino shipbuilders. After doing so for the longest time, ShAP is still willing to give it another shot. The reason being, the Government may finally take notice!
Senator Richard Gordon recognized the need to add Naval Architecture to the curriculum. Senator Gordon also noted, “Building our own ships would be cheaper and it would give our naval architectural designers a chance to get what we want. “Dapat maglagay na tayo ng sarili nating capability to build our own ships. Building our own ships would be cheaper and it would give our naval architectural designers a chance to get what we want. Dapat maglagay na tayo ng sarili nating capability to build our own ships.”
Stepping Up
The Maritime Industry Authority (MARINA) and the Society of Naval Architects and Marine Engineers (SONAME) have stepped up the efforts to strengthen the technical capacity in shipbuilding, recycling, and audits.
MARINA Administrator Robert A. Empedrad said the partnership with SONAME, entails capacity-building measures for MARINA’s technical personnel. At present, MARINA has 45 registered naval architects nationwide who formulate technical standards for shipbuilding, ship repair, and ship recycling. SONAME, a regular member of the Marina Board, has been collaborating with MARINA in providing capacity-building activities for its naval architects and other engineers involved in the regulation of the country’s shipbuilding, ship repair, and ship recycling industry.
Transforming Maritime Education
The seafaring sector figures prominently in the country’s blue economy agenda. For the Philippine archipelago, the blue economy stretches through numerous fields of interest but is possibly considered inconsequential and therefore shoved to the sidelines. Economic activities of the ocean and for which the application of specific expertise is crucial include marine science, marine biotechnology, oceanography, naval architecture, offshore resource extraction operations, coastal management, marine resource conservation, and including but not limited to maritime administration, and port operations and management. The list is not exhaustive nor is it exclusive.
Expanding the concept of maritime education beyond seafaring and the STCW convention, therefore, is the logical way forward for an archipelago desiring to optimize the benefits generated by the blue economy.
In closing, we must recognize that we are a maritime nation, and thus Maritime Domain Awareness is a must for us.
Seafaring has been in our rich history, but our Blue economy needs more than just seafarers. For the Philippine archipelago, the blue economy stretches through numerous fields of interests, including marine science, marine biotechnology, oceanography, naval architecture, coastal management, marine resource conservation, and including but not limited to maritime administration, and port operations and management.
Expanding the concept of maritime education beyond seafaring and the STCW convention, therefore, is the logical way forward for an archipelago desiring to optimize the benefits generated by the blue economy.
Maritime education that embraces the blue economy initiative widens the options in developing the country’s human capital. Students who may not have the aptitude for a shipboard career or those who for reasons beyond their control fail to complete the merchant marine programs, i.e., lack of berths for a cadetship, may instead seize the opportunity offered in other maritime-related professions. This means that any attempt to develop and promote maritime education, either by a legislative or executive act, must not limit the fields of discipline to BS Marine Transportation or BS Marine Engineering or any associated shipboard programs.
A look at what courses are offered at major universities
Our more than a hundred Maritime Education institutions offer only seafaring courses of BS ‘this and that.’ Having focused our resources on a green economy it is about time to focus on the Blue economy.
The National Marine policy entails Ocean Governance and Ocean management. These two fields require human capital. Our Maritime education institutions should incorporate these in their curricula. Our major universities such as UP, DLSU, and ADMU offer courses in BS Biology with specializations in Marine Science as well as Environmental Science. Many other marine courses can be taught in existing maritime schools and major universities.
We have been providing the world seafarers for the longest time, the rest of the world has been catching up with the world’s second most populous nation interested in providing seafarers –a sleeping giant has awoken. We are not abandoning deployment, but we also need manpower in other maritime-related fields, from shipbuilding and marine biology to ocean governance and management. It is about time to transform a number of our seafarer schools to a total Maritime School offering what is already offered in big universities on Marine and Environmental Science.
For the lack of Domestic ships for Onboard Training, if we can unleash the potential of our available Naval Architects by allowing entry for new local shipbuilders, then the lack of ships will be addressed and there would be more room for cadets to have Onboard Training. We could also build our own international vessels.
About the Author
Karl M Garcia’s interest in Maritime concerns was developed while observing his dad through the years in his capacity as a retired Navy officer who supervised the Navy’s first phase of modernization and once led the Committee on the separation of the PCG from the PN. Karl joined his father later as a consultant to Senators Biazon and Trillanes. Karl holds a BS Computer Science degree from AMA Computer University, and an MBA from DLSU Graduate School of Business.