A South Korean firm has launched shipbuilding operations at the Subic shipyard in Luzon, the Philippines’ largest island. Philippine President Ferdinand Marcos Jr. led the opening ceremony in September 2025, marking a new chapter for a facility that once symbolized the country’s shipbuilding prowess and is expected to bolster Manila’s maritime defenses.
Shuttered in 2019 due to bankruptcy, the shipyard is being revitalized under a lease agreement with a United States-owned company.
Seoul’s ambassador to the Philippines emphasized the significance of the trilateral cooperation, which involves shipbuilder HD Hyundai Heavy Industries and shipyard operator Agila Subic, part of Cerberus Capital Management.
“This event is a symbol of powerful tripartite partnership. Korea brings shipbuilding excellence, the U.S. provides financial strength through Cerberus, and the Philippines offers a skilled workforce and strategic location,” Ambassador Lee Sang-hwa said. “Together, we are not just rebuilding a shipyard — we are building bridges across the Pacific.”
As geopolitical tensions rise, South Korea is preparing to meet growing demand for naval capabilities while reinforcing its strategic ties, including with longtime ally the U.S., according to the Center for Strategic and International Studies, a Washington, D.C.-based think tank.
Lee said the collaboration reflects the strategic goals discussed at the recent South Korea-U.S. summit. “If the United States aspires to make American shipbuilding great again in cooperation with Korea, then let us also work hand-in-hand to make Philippine shipbuilding great again,” he said.
The shipyard’s location on Subic Bay — 90 kilometers from Manila and near the contested South China Sea — enhances its strategic importance. Once a military base for the U.S., the Philippines’ mutual defense treaty ally, Subic offers potential for industrial growth and enhanced defense capabilities.
China’s aggressive moves in the resource-rich South China Sea, a vital global trade route, have spiked regional tensions and sparked confrontations between Beijing and Manila. China claims almost the entire sea, including waters in the Philippines’ internationally recognized exclusive economic zone (EEZ). Beijing disregards an international tribunal’s 2016 ruling invalidating its claims and continues deploying coast guard, naval and maritime militia ships to block, ram and harass Philippine civilian, law enforcement and military vessels operating lawfully.
“Subic provides an opportunity to develop a robust shipbuilding industry. It also provides a critical forward-operating base for naval operations in the West Philippine Sea,” retired Philippine Navy Rear Adm. Rommel Jude Ong told FORUM, referring to the portion of the South China Sea within Manila’s EEZ.
The Philippine Navy leases part of the shipyard for vessel repairs. The French Navy’s carrier strike group, led by the nuclear-powered Charles de Gaulle, docked at Subic Bay in February 2025 during its Indo-Pacific deployment. A month later, the Japan Maritime Self-Defense Force frigate JS Noshiro arrived at the former U.S. naval base during a goodwill visit.
“Reviving our shipbuilding industry and repurposing it to support the Navy and Coast Guard is a strategic move,” Ong said. “It will provide a sustainable solution to support the need for more ships that can be deployed to protect our sovereign rights in our exclusive economic zone.”
With the launch, the Philippines is “reclaiming our rightful place among the world’s great shipbuilding nations,” Marcos said.
The lease and investment by Hyundai, among the world’s largest shipbuilders, is projected to create 4,300 jobs by 2030, and the yard has secured orders for up to eight long-range tankers, effectively doubling its capacity.
“From 2014 to 2018, our shipyards were producing 1.2 to 2 million gross tons of ships — roughly around 20 oil tankers or 30 large container ships — annually,” Marcos said. “With Hyundai Heavy Industries investing in Subic, our shipyard capacity will significantly increase from 1.3 million to 2.5 million deadweight tons.”
