China should fulfill investment pledges, says DFA

THE PHILIPPINES under President Ferdinand R. Marcos, Jr., will pursue investment commitments that China made to his predecessor, according to the Department of Foreign Affairs (DFA).

“The department continues to follow up on deliverables stemming from discussions between the previous administration and China,” the DFA told BusinessWorld in a text message last month.

“We are also working on renewed commitments and thrusts of the current administration in terms of its policy on China, with a keen focus on economic cooperation,” it said. “This is crucial as both economies emerge and recover from the coronavirus pandemic.”

During ex-President Rodrigo R. Duterte’s visit to Beijing in October 2016, China promised $24 billion worth of assistance and investments.

Of the total, $15 billion was supposed to be for business-tobusiness deals and $9 billion for loans from credit facilities made available to companies and development projects.

The deal was meant to benefit different sectors, including agriculture, energy, tourism, food, manufacturing, telecommunications and infrastructure, former Trade Secretary Ramon M. Lopez had told reporters. These were supposed to create at least 2 million jobs.

The Chinese Embassy in Manila did not respond to a Viber message seeking comment.

There is “nothing to get excited about,” Herman Joseph S. Kraft, who heads the University of the Philippines Political Science Department, said when asked about the chances of China following through with its promises.

“The Philippines has always not been a priority for investors,” he said in a Viber message. “Regardless of the agreements, Chinese investors are also going to consider the investment environment.”

“In that context, countries like Vietnam and others in the

Association of Southeast Asian Nations have always been seen as a better investment destination,” he added.

Mr. Marcos has said he wants to attract more foreign direct investments.

“I reiterate my vision of improving our business climate and elevating the status of the Philippines as a top investment destination through various endeavors,” he said on Oct. 20. “We continue to harmonize efforts of all investment promotion agencies, government agencies and local government units to effect greater synergies”.

The Philippines’ regional peers including Indonesia and Vietnam have an edge because “investments beget other investments,” UA&P economist George N. Manzano said in a Viber message.

“One can speculate that there is an element of uncertainty about the recent presidential election that could induce a waitand-see attitude,” he said. “If other countries will invest in the Philippines, I think this will give a signal that it is an attractive investment site.”

That is why the Foreign Affairs department should follow up on China’s investment commitments, he added.

Jaime B. Naval, who teaches political science at the University of the Philippines, is more optimistic.

“Because China seeks the goodwill and cooperation of President Marcos, we’d expect it to follow through a number of its previous promises, and even lay down new if not more, appealing carrots,” he said in a Facebook Messenger chat.

He also said a South China Sea claimant that defers to China doesn’t mean it would be generously treated in terms of investment and assistance.

Mr. Duterte had sought closer trade and investment ties with China since he came to power in 2016, including potential joint explorations for oil and gas in the South China Sea.