DEFENSE Secretary Gilberto Teodoro Jr. said the Philippines must rebuild its steel industry to reduce dependence on foreign suppliers and strengthen its capacity to produce defense equipment and other strategic infrastructure.
Teodoro said the proliferation of allegedly substandard steel operations in the country was not merely an environmental or industrial concern but had implications for national security.
He said dependence on foreign sources for steel and other raw materials could weaken the country’s industrial base and leave the Philippines reliant on other countries for critical requirements.
Teodoro said a domestic steel industry was essential to producing quality ships and other defense equipment, particularly as the Philippines seeks to expand its defense production capabilities.
He pointed to the country’s long-standing neglect of the steel industry, including the closure of the former National Steel Corp., as a factor in the current dependence on imported materials.
The government, he said, must develop alternatives to relying heavily on China and other foreign suppliers.
Teodoro cited discussions with South Korea on the possible joint production of naval vessels for the Philippine Navy, saying such projects could help develop the country’s defense manufacturing capabilities.
But he stressed that sustained defense production would require more than assembling equipment locally.
The Philippines must develop its own industrial capacity, including a viable steel industry, reliable and affordable electricity and efficient logistics, he said.
Teodoro said high electricity costs, logistics problems and weak industrial capacity are major obstacles to making Philippine defense production competitive.
“Before you have defense production, you need industrial productivity capacity,” he said.
He also cautioned that technology transfer would remain limited if the Philippines only provided foreign companies with workers and facilities.
The country, he said, must be able to contribute more to the production process and build domestic capabilities that would allow it to benefit from technology transfers.
Teodoro also raised concerns over steel plants allegedly using induction furnaces and other processes that, he said, were no longer allowed in China because of their environmental impact.
He said authorities had information indicating that similar facilities were operating in several parts of the Philippines.
