Defence officials say plans by Chinese investors to develop infrastructure and tourism facilities on three Philippine islands pose a security risk and undermine Manila’s position in its dispute with Beijing over the South China Sea . Philippine naval and national defence chiefs, who say they were not consulted in advance about the plans, warn the developments would give Beijing footholds on strategically important locations at the edge of the disputed waters. The proposed development of Fuga, Chiquita and Grande islands is part of a US$12 billion deal formalised when Philippine President Rodrigo Duterte visited China in April, meeting his counterpart Xi Jinping and attending the Belt and Road Initiative forum. The plans include a US$2 billion smart city on Fuga, a 10,000-hectare island in Cagayan province, which once served as a staging post for troops during World War II . The development of Fuga would be based on a mega-infrastructure project in China’s Fujian province and built by Xiamen-based Fong-Zhi Enterprise. The proposals also envisage tourism, leisure and investment facilities on Grande and Chiquita islands, both situated near Subic Bay , which previously hosted a US naval base that was closed in 1992. The two islands are not far from Scarborough Shoal that Beijing seized in 2012. Former Philippine congressman Gary Alejano, an ex-marine captain and known critic of Duterte, said he strongly opposed the investment programmes as they threatened his country’s security and the livelihoods of Filipino businesspeople. Defence chief accuses China of ‘bullying’ over maritime claims “The Philippines should understand that we shouldn’t put all our eggs in one basket. At the end of the day, most likely, the Philippines will be the loser,” said Alejano, who has previously warned of Beijing’s increasing presence in the South China Sea. “Our security and economic sectors are at odds. The security sector is losing out because our president is friendly with China. They cannot even comment or offer any input. But all economic activities also have security concerns.” Alejano said it would be difficult to retake the islands from the Chinese after the developments were established, and any attempt to do so by force would sever diplomatic ties. “China takes these steps gradually. If we complain then we have a problem,” he said, adding that once money was involved, untangling the two countries’ assets on the islands would be costly. The Philippines under Duterte has taken out a US$211 million loan from Beijing for its flagship Build, Build, Build programme . Support for Philippines’ protest against Chinese boats in South China Sea The Cagayan Economic Zone Authority says no Chinese investment has been secured since Duterte and Xi formalised the deal, but defence officials have already raised concerns about the project’s future implications for national security. “We would be remiss in our job if we did not at least call their attention to this,” Philippine navy spokesman Captain Jonathan Zata said on Monday. “We know we need industry and economic activity to jump-start our nation’s economy, but there should be a balance with national security.” Philippine defence secretary Delfin Lorenzana said he was unaware of the development plans but would instruct his intelligence team to carry out an assessment. “Just like the Philippine navy, the Department of National Defence was also not consulted,” he said. Duterte’s spokesman, Salvador Panelo, on Monday refused to comment on the issue. “We will wait for the national security adviser and the secretary of national defence to give their comments on the security issues affecting those three areas,” Panelo said. The winners and losers in Duterte’s China play Historically the islands were used by China as potential jumping-off points for invasions or as defensive blockages. The Philippine navy describes the area as a section of water and islands that China now aspires to close in on. Beijing claims most of the mineral-rich South China Sea , including areas that reach the shores of its smaller neighbours. Brunei, Malaysia , the Philippines, Vietnam and Taiwan also have claims to the region. In Philippines, fears of slow internet trump fears of China In 2016 the Permanent Court of Arbitration at The Hague ruled in favour of the Philippines , but Beijing has since ignored the decision. Duterte welcomed the ruling but took little action in response. The president is set to visit Beijing again this month, and on Tuesday Panelo said the Philippine leader would raise the issue with Xi. At a cabinet meeting on Monday, Duterte also approved a proposal by his foreign affairs department to stamp Philippine visas into the passports of Chinese visitors – a practice previously outlawed due to a map in the document depicting Beijing’s maritime claims. Immigration officials currently stamp the visa on a piece of paper.