Philippine President Rodrigo Duterte, pictured with Chinese President Xi Jinping, has fast-tracked big-ticket Chinese projects. Photo: AP
Richard Heydarian
Richard Heydarian

Scepticism rises in Philippines about Chinese projects and Duterte’s support of them

  • Concerns are growing, especially within the military, that large-scale Chinese investment is a Trojan horse
  • Over the past year, several top Philippine officials have publicly complained about the backlog in promised Chinese projects

In Virgil’s Aeneid, the Trojan priest Laocoon warns: “Whatever it is, I fear the Greeks, even bringing gifts.” Amid the blossoming Philippine-China relations, many Filipinos, long accustomed to seeing Beijing as a hostile power, have turned into modern Laocoons.

There are deep worries, especially among those from the defence establishment, that large-scale Chinese investments are nothing but a Trojan horse with dire consequences for the Philippines. But as President Rodrigo Duterte slides into his twilight years in office, much-delayed Chinese infrastructure investments have gained steam.

Eager to vindicate his China-friendly foreign policy, the Philippine leader has fast-tracked big-ticket Chinese projects despite stiff domestic resistance. And Chinese companies – uncertain about post-Duterte political winds in the Philippines’ notoriously mercurial democracy, where pro-American and pro-Chinese camps constantly jostle for power – seem intent on finalising strategic investments before time runs out.

The biggest of them all is the recently awarded US$10 billion international airport project in Sangley, which lies close to strategic military and civilian facilities. If completed, it would mark the largest and among the most strategic Chinese investments in the Philippines’ history.

Philippine Foreign Affairs Secretary Teodoro Locsin Jnr has complained that Chinese projects have “hardly materialised”. Photo: Reuters

Over the past year, top Philippine officials have been publicly complaining about the backlog in promised Chinese investments. During a speech at Asia Society in New York in September, Foreign Secretary Teodoro Locsin Jnr groused that “we signed up [to] this and that agreement [with China], but they hardly materialised”.

Instead, he praised China’s arch-rival, extolling “a rising Japan” and how the Philippines was “feeling” Japan’s benefits and resilience as a major source of development assistance in the region. Months earlier, former budget secretary and current central bank governor Benjamin Diokno openly complained about the need for the Chinese government to “put pressure on the speed of implementation of all these [promised] projects”.

Ahead of his fateful election in 2016, Duterte made it clear that he preferred warmer ties with Beijing, saying: “What I need from China is help to develop my country.”

And China seemed all ears. By the end of that year, the Philippine president had secured US$24 billion in Chinese-pledged investments, a crucial element to legitimise his controversial pivot-to-Beijing policy.

Locsin says Beijing’s South China Sea code is like ‘a manual for feeding a dragon’

In a profoundly American-influenced society, where China has suffered consistently net negative approval ratings, Duterte was desperate for literally concrete gifts to justify his Beijing-friendly diplomacy.

Crucially, he sought to rationalise his quiescent position on the South China Sea disputes, including his de facto shelving of the Philippines’ landmark arbitration victory against China, by invoking the supposed economic benefits of his foreign policy recalibration.

But halfway into his presidency, Duterte did not have much to show for his efforts. Big-ticket Chinese investments faced myriad obstacles: bureaucratic red tape, relatively strict regulatory oversight, hostile media coverage and determined resistance form influential circles, including the defence establishment and senior magistrates.

Among the 10 proposed big-ticket Chinese infrastructure projects, barely a single one has cleared the preliminary phases of implementation. Potentially game-changing projects such as Subic-Clark cargo train and the trans-Mindanao Railway were eventually either shelved or stuck in limbo.

And the promising Chico River Pump Irrigation and Kaliwa Dam projects were mired in controversy due to “debt trap” and ecological dislocation concerns.

Rodrigo Duterte is coming to the end of his time as the Philippines’ leader. Photo: AP

Facing immense public pressure, Duterte was forced to call for a review of all big-ticket Chinese infrastructure projects last year.

Meanwhile, the powerful Philippine defence establishment, which has retained robust ties to the Pentagon, openly opposed and effectively vetoed reported Chinese acquisition plans across strategic ports in Subic and the northern island of Fuga.

In contrast, big-ticket Japanese investments, including the Metro Manila subway and the North-South Commuter Railway project linking industrialised regions of the Philippines, pushed ahead with gusto. And across the region, Japanese investments (worth US$230 billion) surpassed China’s (worth US$155 billion), especially in the critical emerging nations of Vietnam and the Philippines.

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But as Duterte has inched closer to his final years in office, he has shown renewed determination to fast-track Chinese investments.

First, while he should have been impartial, he openly supported the entry of a China Telecom-backed Mislatel consortium into the Philippines’ highly restrictive telecommunications sector. Following the finalisation of the new telecoms deal with the Philippine government, even the Philippine military signed a cooperation agreement with the new consortium.

Soon after, the Philippine leader shifted his focus to defending the US$66 million Chico River Pump Irrigation and US$24 million Kaliwa Dam projects, which swiftly secured environmental compliance certifications. Duterte even went so far as advising the courts against disrupting the proposed projects through temporary restraining orders (TROs).

“I’m warning the judges – be sparing about issuing TRO; otherwise, I will publicly announce do not follow [your decision]. You follow the programme of the government,” he said, potentially violating the Philippines’ constitutional principles on separation of powers.

Duterte to use ‘extraordinary powers’ to push through China-funded Kaliwa dam

And right before the end of 2019, the Duterte administration awarded the US$10 billion Sangley Point International Airport project in Cavite to the joint consortium between China Communications Construction (CCC) and its local partner under Chinese-Filipino tycoon Lucio Tan.

There was apparently no other competing bid. Even more astonishingly, the World Bank recently blacklisted the state-owned CCC for questionable practices of its subsidiaries. One was implicated in bidding collusion, while another was involved in reclamation activities within the Philippine-claimed waters.

Given the scale of the investment, and its proximity to key military and civilian facilities in the Philippines, there was a massive outcry, especially among former officials. But Duterte and China seemed determined to finalise major and even potentially risky investments before the president’s term officially ends in mid-2022.

Like the ancient Laocoon, who was ignored by his compatriots, former Philippine Navy chief Admiral Alexander Pama lambasted the proposed Chinese project as “a dagger pointed to the heart of the nation!”

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This article appeared in the South China Morning Post print edition as: Many Filipinos remain wary of Beijing bearing gifts