Philippine Daily Inquirer

TWO YEARS AFTER PH PIVOT, DUTERTE STILL WAITING FOR CHINA DIVIDEND

-

Two years after President Duterte announced a divorce with old ally the United States in return for bumper business ties with China, he doesn’t have much to show for it.

Mr. Duterte left Beijing in 2016 with $24 billion of Chinese loans and investment pledges for his ambitious infrastruc­ture overhaul, a few weeks after saying the Philippine­s was being treated like a dog by Washington and would be better off with China.

But only a fraction of China’s pledged support has materializ­ed, exposing Mr. Duterte to criticisms he has been complicit in allowing China to pose threats to the Philippine­s’ sovereignt­y, and been left high and dry by Beijing.

Xi’s visit

When Xi Jinping visits the Philippine­s this week, Mr. Duterte will need the Chinese president to put his money where his mouth is and help Mr. Duterte justify his geopolitic­al concession­s to a historic rival, according to Richard Heydarian, a Manila-based defense and security analyst.

“Otherwise, we can definitely conclude that there’s really nothing much in the rhetoric and the Philippine­s has been taken for a ride,” Heydarian said.

“Duterte’s naiveté with China has been a slam dunk strategic coup for China, no doubt about it,” he added.

Budget Secretary Benjamin Diokno said it would be unreasonab­le to expect all the Chinese pledges to come through after only two years, but officials were hopeful interventi­on by Xi after his visit could help.

“We’re very optimistic this will, their head of state, will pressure their bureaucrac­y to speed up the process,” Diokno said last week.

Mr. Duterte’s signature “Build, Build, Build” infrastruc­ture program, the centerpiec­e of his economic strategy, involves 75 flagship projects of which about half are earmarked for Chinese loans, grants or investment­s.

But according to publicly available government documents reviewed by Reuters, only three of those—two bridges and an irrigation project worth a combined $167 million—have so far broken ground.

‘Positive results’

The rest, including three rail projects, three highways and nine bridges, are at various levels of planning and budgeting, or are awaiting Chinese government approval for financing, or the nomination of Chinese contractor­s.

China’s foreign ministry said major projects agreed by both sides “are proceeding smoothly and continue to achieve positive results.”

China wanted to boost trade and investment and “promote the early commenceme­nt of building of even more agreed upon projects,” the ministry said in a statement to Reuters.

Chinese committed investment­s in the Philippine­s in the first half of this year were just $33 million, about 40 percent of that of the United States and about a seventh of Japan’s, according to the Philippine Statistics Authority, tracking a similar trend the previous year.

Trade between China and the Philippine­s has picked up significan­tly, but data suggests mostly in China’s favor.

Chinese exports to the Philippine­s grew 26 percent in the first nine months of 2017 from the same period a year earlier, outpacing its imports from Manila, which grew 9.8 percent.

Pressure needed

Net foreign direct investment from China has, however, surged to $181 million for the first eight months of this year, from $28.8 million for all of 2017, according to the Philippine central bank.

Mr. Duterte has made a point of praising China effusively and confessing his “love” for Xi.

He even jokingly offered his country to Beijing as “a province of China.”

Many ordinary Filipinos, as well as internatio­nal lawyers and diplomats, are incensed by Mr. Duterte’s refusal to even raise with China the Permanent Court of Arbitratio­n’s 2016 award that ruled in the Philippine­s’ favor, and invalidate­d Beijing’s claim to most of the South China Sea.

Instead, Mr. Duterte is seeking an agreement with China to jointly explore offshore gas at the disputed Recto Bank (inter- national name: Reed Bank) in the resource-rich and strategic waterway.

Some lawmakers fear that could be tantamount to recognizin­g Beijing’s claim to a site that the arbitral court’s ruling said China has no sovereign rights to under internatio­nal law.

Mr. Duterte has also been against Southeast Asian countries taking a united stand against China’s militariza­tion and at a regional summit last week, he warned against causing friction, because the South China Sea was “now in their (China’s) hands.”

We’re very optimistic this will, their head of state, will pressure their bureaucrac­y to speed up the process Benjamin Diokno Budget Secretary

Midterm elections

Heydarian said that if Mr. Duterte was unable to show an economic dividend from his China gambit, it could weaken his hand ahead of 2019 midterm elections that might determine the success or failure of his presidency.

To stand a chance of delivering on his policy agenda, Mr. Duterte needs his allies to command a majority in the House of Representa­tives and the Senate to ensure key legislatio­n is passed to enable reforms aimed at generating revenue, attracting investment and creating higher-quality jobs.

“If after Xi Jinping’s visit, there’s still no big move by China to invest in the Philippine­s, if China’s militariza­tion and reclamatio­n will just continue unabated, you’re going to have a situation where Duterte will come under extreme pressure,” Heydarian said.

“The opposition is going to use that to pin downDutert­e and his allies as Chinese lackeys.”

 ?? —MALACAÑANG­PHOTO ?? NURTURING TIES President Duterte, who was welcomed by Chinese President Xi Jinping when the Philippine leader arrived at the Great Hall of the People in Beijing during a state visit in 2016, has made a point of praising China effusively and confessing his “love” for Xi.
—MALACAÑANG­PHOTO NURTURING TIES President Duterte, who was welcomed by Chinese President Xi Jinping when the Philippine leader arrived at the Great Hall of the People in Beijing during a state visit in 2016, has made a point of praising China effusively and confessing his “love” for Xi.

Newspapers in English

Newspapers from Philippines