Subic Bay is emerging as more than a former American naval base. It is becoming a key part of the United States’ strategy to keep its warships battle-ready in the Indo-Pacific without sending them back across the Pacific for repairs.
A new study by the Center for Strategic and International Studies (CSIS) says the United States is increasingly relying on allied shipyards in Asia to maintain and sustain its naval fleet closer to potential flashpoints, with the Philippines taking on a strategically important role alongside Japan, South Korea, and Singapore.
The shift comes as Washington struggles with a shrinking domestic shipbuilding industry and mounting maintenance backlogs while intensifying its military competition with China in the Indo-Pacific and the South China Sea. China now accounts for more than half of the world’s shipbuilding capacity, giving Beijing a powerful industrial base for its rapidly expanding navy, according to the CSIS report.
Rather than returning damaged or aging vessels to the U.S. mainland, the Navy is expanding maintenance, repair, and overhaul (MRO) work at allied facilities across the western Pacific.
“By establishing the ability to repair and sustain larger numbers of ships closer to potential conflict areas in the Indo-Pacific, the United States could potentially support extended deployments—including during wartime—by reducing the need to recall ships to the U.S. mainland for repairs,” CSIS said in its report, Evaluating Pathways for U.S. Shipbuilding Cooperation with Allies.
The Philippines has already demonstrated how that strategy works in practice.
After suffering a power failure in July, the Arleigh Burke-class destroyer USS Benfold was stranded in the South China Sea before being towed to Subic Bay for emergency repairs. The work took about 10 days, allowing the destroyer to quickly return to operations instead of making the long journey back to the United States.
CSIS points to Subic Bay as one of the most promising locations for expanding allied naval repair capacity because of its deep-water harbor, existing shipyard infrastructure, and proximity to the South China Sea. The report says increasing repair capacity in allied countries, including the Philippines, could ease pressure on overloaded U.S. shipyards and keep more warships deployed in the region.
At the center of that effort is Agila Subic Shipyard, the former Hanjin Heavy Industries Philippines facility. Now owned by New York-based Cerberus Capital Management, the shipyard features one of the region’s largest dry docks and is supported by U.S. defense contractor V2X, which provides maintenance services for U.S. naval vessels.
While South Korea and Japan remain Washington’s primary shipbuilding partners because of their world-class shipbuilding industries, CSIS says the Philippines occupies a different but equally strategic niche: serving as a forward repair, maintenance, and logistics hub for U.S. and allied naval operations in the western Pacific.
The report stops short of describing the Philippines as a major naval shipbuilder. Instead, it argues that the country’s greatest advantage lies in helping sustain allied fleets at sea while the United States works to rebuild its own shipbuilding capacity.
CSIS also says that the Philippines will need more skilled workers, infrastructure investment, and industrial capacity before it can take on a larger role in naval shipbuilding.
However, the report finds that Subic’s value already extends beyond shipbuilding: its ability to repair and sustain allied vessels closer to the western Pacific could make it an increasingly important logistics and maintenance hub for U.S. naval operations.
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