The Philippines’ Pivot to China

A composite picture of the flags of the People’s Republic of China and the Republic of the Philippiines. Photos courtesy of Wikimedia Commons.

In the middle of March 2017, China’s Vice Premier Yang’s Wa … oh sorry, I meant, “Yang Wang” (cough, cough) … while visiting Davao City expressed interest in funding at least two projects that was presented to him by the Philippine government. The two Infrastructure projects are worth a total of USD 3 Billion (or Php 150 Billion, assuming an Exchange Rate of USD 1 = Php 50) spanning 223 kilometers (km) of Infrastructure for Mindanao.

The first of these is the Davao City Expressway Project with a budget of USD 490 million (Php 24.5 Billion) which is a 23.3 km highway that features an elevated expressway.1 The second is the Mindanao Railway Project with a budget of USD 2.56 Billion (Php 128 Billion) is a 200 km circuitous railway line that connects the major cities of Mindanao like Davao, Zamboanga, Butuan, Surigao, Cagayan de Oro, Iligan and General Santos City.2

If China does go and proceed funding for these projects, then these could be just the tip of the iceberg as when Duterte visited China in October 2016, the windfall of that visit was estimated to be up to USD 24 Billion (Php 1.2 Trillion) worth of deals.3 So those two projects comprise of only 13% of what could come, with possibly an additional 87% or USD 21 Billion (Php 1.05 Trillion) more worth of deals coming in.

’China Pivot’
This is just one of the many signs of the Philippines’ “Pivot to China” where the Philippine government started treating China as a close ally and began wooing them with deals. It officially started when President Rodrigo Duterte was elected into power in July 2016, and aside from economic deals, the other fields where similar interactions occurred are:

  • Sports, where China offered to train Filipino Athletes and Coaches at National Training Centers in mainland China,4 and to build a similar training center in the Philippines;5

  • Tourism, where Chinese President Xi Jin Ping promised to send at least two million Chinese tourists to the Philipines this year;6

  • Coast Guard Trainings and Exercises, where there will be an exchanged of ships and personnel and joint exercises.7

And this is just the start, as time goes by and this government’s friendship with Beijing goes deeper, then it is expected that this new level of cooperation will extend to other fields like Agriculture, Energy, Telecommunications, etc.

’Strings Attached’
But it would be incredibly naïve for us to think that all these will come without any strings attached, and as to what those strings are, my guess is that it will be a share of our natural resources like in the areas of the West Philippine Sea (WPS) and maybe even Benham Rise.

After all, they already act as if they really own some of our territory in the WPS, like the fact that we have had to ask their “permission” a couple of months ago for our countrymen to fish at Scarborough Shoal,8 an area that is just off the coast of Luzon. The situation would’ve been so funny if it weren’t so tragic.

As for Benham, the Secretary of Defense Delfin Lorenzana just revealed recently how a Chinese ship spent three months going around there9 on what could only be surveying activity, so their interest in that area is very clear.

’Our Maritime Resources’
Of course the potential resources in the WPS is a lot more than just the USD 24 Billion that China is offering. Recto Bank (or ‘Reed Bank) alone for example is estimated to hold approximately 2.5 Billion barrels of oil (bbl) as reported by the United States Energy Information Administration (EIA)10. At current prices (USD 50 per bbl), that is equivalent to USD 125 Billion worth of Oil.

The prospect of finding oil in Benham Rise on the other hand is very low, but it is very rich in marine life and other aquatic resources.11 It is possible that China will try to find a way to get a share of those resources also.

Now our Constitution does not allow Joint Development or Exploration of our Exclusive Economic Zones (EEZ) with other sovereign states, but there are legal ways around this as shown by the current setup in the Malampaya Oil and Gas field wherein foreign companies were hired as Contractors by the Philippine government.12 And Duterte himself also did say that he was very much willing to share our maritime resources with China.13

’No Surprise’
It should come as no surprise that Duterte is now making a big pivot to China because during his campaign for the Presidency, he professed clearly and repeatedly his desire to have “friendlier” relations with them.14 That was one of the main reasons why I personally I went out and fought long and hard against his candidacy.

But ultimately efforts like mine fell on deaf ears as not only did he win, he won by a landslide, getting almost twice as many votes as the next closest candidates Mar Roxas and Grace Poe.15 So in effect, the majority has spoken, and what they say is basically they agree with most if not all of what Duterte intends to do, including this Pivot to China.

There will be many theories as to why Duterte won despite his position on China, personally I think that Filipinos are just so sick of Poverty, so sick of being left behind by our neighboring countries and so hungry for Economic Development that they don’t care anymore where the solutions will come from and what they will have to trade off for them, as long as those issues are solved. And they want the solutions here, immediately, as in right now.

There has been some improvement in the quality of life of Filipinos after the first EDSA Revolution, but it has not reached the point where we want it to be. Poverty Rate is still high, at around 25% is still one of the highest in South East Asia (SEA).16 Infrastructure wise, we are still trailing way behind our neighbors, as shown in accounts like my blogs about Thailand’s infrastructure,17 for example.

’Coercion and Sharing’
In fairness to Duterte, though, the way things are setup right now is that it doesn’t look like China will allow us to exploit our resources in the WPS on our own. Their buildup of artificial islands and military facilities there enables them to monitor that area all the time and gives them the power to allow or deny the use of those areas by other countries like ours.18

So on one hand they have the muscle to trouble us if need be, and on the other hand they are offering us all these incentives on the side. So either we accept whatever “gifts” they are offering us right now, or else they will use force against us and we will be left with nothing at all.

It’s like the “Carrot or Stick” policy of the Americans, or the “Plata o Plomo (Silver or Lead)” policy of the Latin Drug Lords. In a way, this must be how it feels like when the Italian Mafia comes in to steal business away from someone, sort of like being told, “sell your stuff to us now at a cheaper price, or you get nothing when we muscle in on you”.

’Chinese Sphere of Influence’
If China does deliver on all their promised deals, and they are successful in implementing or executing those in the next couple of years, then I expect the Philippines to move even closer and fall into what I would call as the “Chinese Sphere of Influence” in Asia which includes countries that have close relations to Beijing like Cambodia, Laos, Pakistan, Bangladesh, etc.

Subsequently it could also mean we will be moving further away from our traditional ally, the US. And that trend has already started: In the survey made by the Social Weather Station (SWS) last October 2016,19 the Filipinos’ Trust Rating for the US dropped by seven percentage points.

On the other hand, the Filipino’s Trust Rating for China rose by an incredible 41 percentage points in just one survey. I think that if Duterte and China are successful with their collaboration, then we can only expect this trend to continue further.

’Parting Shot’
So lucrative deals with China in various fields are coming into the country thanks to the change in policy of the new administration. This comes as no surprise as Duterte has been pretty transparent about his intention in this regard even before the election, and yet he still won by a landslide.

If most of these deals are successful, it means we will end up closer to Beijing and farther away from our American allies. These deals will likely come with a price though which I assume will be in the form of sharing our natural resources with China especially those that are in our EEZs.

Whether we are following the right path or not with this “Pivot to China”, I am not really that sure. But the majority has spoken, and we are in a Democracy where the majority rules, so I guess all of us who don’t share their view are just in it for the ride. I hope that where it will take us will be for the good, for the sake of everyone in this country.

President Rodrigo Roa Duterte shakes hands with the People’s Republic of China President Xi Jinping during Duterte’s State Visit to China in October 2016. Photo courtesy of Wikimedia Commons.

SOURCES:


  1. Davao City Expressway Project,
    (https://web.archive.org/web/20170326094434/https://www.facebook.com/PTVph/posts/1555126894547975
  2. Mindanao Railway Project,
    (https://web.archive.org/web/20170326094518/https://www.facebook.com/PTVph/posts/1555135677880430
  3. China visit helps Philippines reap $24b funding deals,
    (https://web.archive.org/web/20170328074803/http://timesofoman.com/article/94737/Business/China-visit-helps-Philippines-reap-$24b-funding-deals
  4. China Ready to Host PH Athletes, Coaches,
    (https://web.archive.org/web/20170307140557/http://sports.mb.com.ph/2017/03/06/china-ready-to-host-ph-athletes-coaches/
  5. China to Help PH Build Sports Training Complex,
    (https://web.archive.org/web/20170307140250/http://sports.inquirer.net/240265/china-help-ph-build-sports-training-complex
  6. DOT Confident China Will be Sending 2 M Tourists to PH,
    (https://web.archive.org/web/20170318164506/http://news.mb.com.ph/2017/03/18/dot-confident-china-will-be-sending-2-m-tourists-to-ph/
  7. EXCLUSIVE: PH, Chinese Coast Guards to Hold Training, Joint Exercises,
    (https://web.archive.org/web/20170313110428/http://cnnphilippines.com/news/2017/03/13/Philippines-China-Coast-Guard-joint-exercises.html
  8. China confirms allowing Philippine fishermen access to shoal,
    (https://web.archive.org/web/20170108020443/https://globalnation.inquirer.net/148435/china-confirms-allowing-philippine-fishermen-access-to-shoal
  9. Lorenzana: Chinese ship surveyed Benham Rise for 3 months last year,
    (https://web.archive.org/web/20170328073536/http://www.gmanetwork.com/news/story/602506/news/nation/lorenzana-chinese-ship-surveyed-benham-rise-for-3-months-last-year
  10. Reed Bank ‘holds huge oil, gas reserves’,
    (https://web.archive.org/web/20160513160533/http://www.rappler.com/business/21460-reed-bank-holds-untapped-riches-us-agency
  11. Benham Rise rich in resources, but not petroleum,
    (https://web.archive.org/web/20170401073940/http://www.manilatimes.net/benham-rise-rich-resources-not-petroleum/320323/
  12. Joint development in EEZ ‘prohibited’ – Carpio,
    (https://web.archive.org/web/20170214091652/http://www.rappler.com/nation/139695-carpio-joint-development-eez-constitution
  13. Philippines could share maritime resources with China: Duterte,
    (https://web.archive.org/web/20170331155623/http://news.abs-cbn.com/news/03/24/17/philippines-could-share-maritime-resources-with-china-duterte
  14. Philippines’ Duterte offers hand of friendship to China,
    (https://web.archive.org/web/20161216075037/http://www.scmp.com/news/asia/diplomacy/article/1946067/philippines-duterte-offers-hand-friendship-china
  15. Official count: Duterte is new president, Robredo is vice president,
    (https://web.archive.org/web/20170216022928/http://cnnphilippines.com/news/2016/05/27/official-count-duterte-president-robredo-vp.html
  16. Why is the Philippines Poorer than Its Neighbors?,
    (https://web.archive.org/web/20170326095617/https://rhk111sblogspot.wordpress.com/2016/01/03/why-is-the-philippines-poorer-than-its-neighbors/
  17. rhk111’s Travel Blog – Thailand 2016,
    (https://rhk111stravelblog.wordpress.com/category/thailand/2016-thailand/
  18. Analysts: China Will be Able to Police Rival Countries in Disputed Sea,
    (https://web.archive.org/web/20170331111304/http://www.voanews.com/a/analysts-china-able-to-police-south-china-sea-rivals-soon/3790530.html
  19. Fourth Quarter 2016 Social Weather Survey: Net trust rating of countries,
    (https://web.archive.org/web/20170408145438/https://www.sws.org.ph/swsmain/artcldisppage/?artcsyscode=ART-20170302133149
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