Selling out PH sovereignty and patrimony for conditional Chinese money

Even more alarming than the reported nearly done construction of Chinese military facilities in Philippine-claimed reefs in the South China Sea is the dismissive response of Malacañang. Presidential spokesperson Harry Roque did not just downplay the gravity and implications of what China is doing in the disputed seas. His statement indicates that the policy of the Duterte administration on the territorial conflict with China is to feign helplessness and in effect legitimize China’s violation of Philippine sovereignty and patrimony.

No one is asking the President to declare a war against China. It is also true that the Chinese construction in the reefs started long before Pres. Duterte came into power. But what government should have been doing at the minimum is constantly protest China’s continued militarization of the disputed territories. What it should have been doing is use the favorable ruling by the United Nations (UN) Arbitral Tribunal to strengthen the country’s claim and gather further international support and recognition on Philippine sovereignty over the reefs. But instead of shoring up the country’s assertion of sovereignty through sustained diplomatic actions, Duterte has substantially weakened the Philippine position by kowtowing to China.

Malacañang sells to the Filipino people China’s supposed promise not to reclaim new islands or shoals. However, with its military facilities already entrenched in the disputed areas, China may no longer need additional reclamation, at least in the short term. Or should such need arises, it can easily expand and reclaim new areas precisely because it already has fortified its position. Chinese experts have already said that land reclamation in the South China Sea will continue to expand although they claim that construction would be for civilian and not military purposes. While it is uncertain that China would even honor its promise of not expanding its reclamation, it is certain that taking back from China the territories it grabbed from the Philippines is much more difficult now with its military infrastructure in the disputed areas already in place.

In exchange for a much softer stance on the territorial dispute, Pres. Duterte has actively sought Chinese patronage for his administration’s programs, especially the ambitious “Build, Build, Build” infrastructure program. These include aid, concessional financing and investment pledges that the Department of Finance (DOF) has described as unprecedented and comprise the initial dividend from the President’s supposed foreign-policy rebalancing. So far, these commitments total an estimated US$ 7.34 billion (about Php367 billion @ US$1:Php50) in soft loans and grants, according to the DOF’s International Finance Group (IFG). The amount covers the implementation of 10 big-ticket infrastructure projects as well as the construction of two bridges in Metro Manila and two drug rehabilitation facilities in Mindanao, and aid to rehabilitate Marawi City.

The National Economic and Development Authority (NEDA) has earlier identified Chinese official development assistance (ODA) to bankroll at least three flagship projects of the Duterte administration — the Philippine National Railways (PNR) Long Haul from Calamba to Bicol (Php151 billion); the Kaliwa Dam (Php10.86 billion); and Chico River Pump Irrigation (Php2.70 billion). But note that these are not gifts with no strings attached. (See Table below)

These are loans that must be repaid with interests and are also tied to the provision of contracts to Chinese firms and suppliers. Meanwhile, in exchange for these conditional loans that benefit Chinese banks, corporations (and probably even workforce), the Duterte administration is weakening, if not practically giving up, the country’s claim on 381,000 square kilometers of maritime space as well as vast fishery, oil and gas, and mineral resources.

It is not only in South China Sea that the administration is allowing China to take over the country’s patrimony. Perhaps encouraged by the “peace and stability” that Pres. Duterte’s Martial Law declaration promises and by greater economic opportunities through Charter change (Cha-cha) that lifts restrictions on foreign capital, China is among the leading foreign investors that eye thousands of hectares of land in Mindanao for plantation operations and multibillion transport infrastructure projects to facilitate its exploitation of the region’s wealth. The Duterte administration also let China conduct maritime research in Benham Rise and basically allowed it to make a map of the maritime resources in the country’s eastern seaboard.

But for the President’s spokesperson, such total sellout of Philippine sovereignty and patrimony is not news. #

More articles on China and Pres. Duterte —

“What’s in it for China in Duterte’s ‘Build, Build, Build’?”

“Business interests with ties to Duterte to benefit from Martial Law extension”

Fiscal issues, Global issues, SONA 2017

SONA 2017: What’s in it for China in Duterte’s ‘Build, Build, Build’?

President Rodrigo Duterte with President Xi Jinping of China (Photo from Etienne Oliveau/Reuters, Aljazeera)

In his second State of the Nation Address (SONA), President Duterte as expected mentioned his grand infrastructure plan. There was special mention of China that Duterte said generously offered money for his “Build, Build, Build” program.

“If your Congress has no money, we will give you money” was what the Chinese supposedly told him, the President said in his speech.

Duterte in his SONA made the Chinese offer look like simple altruism and generosity. But in reality, on top of making Chinese imperialism appear benign, using soft power by bankrolling the country’s hard infrastructure profits China’s economy in various ways.

No debt crisis?

The concerns that Duterte’s infrastructure plan would result in a heavy debt burden are valid. After all, the price tag of what economic managers call as the “boldest infrastructure development program” in recent history is a whopping Php8 to 9 trillion.

Economic managers, however, assure the public that they have everything figured out. The plan is that government appropriations, not debt, will mainly fund the so-called “golden age of infrastructure”. The Finance department’s tax reform package aims to raise Php157 billion in additional revenues a year; the version passed by the House could generate Php130 billion.

At Php8 to 9 trillion, the annual cost of building infrastructure from 2017 to 2022 would be Php1.6 to 1.8 trillion. Clearly, the additional revenues from the tax package will not be enough even as it bleeds the poor dry.

In reality, the infrastructure program would be mostly debt-funded. But again, the public is being told that a debt crisis will not rear its ugly head. In fact, the Budget department expects that by the end of President Duterte’s term, the debt-to-GDP ratio would even fall to 38.1% from 40.6% in 2016.

Such optimism hinges on the economy not only sustaining its expansion but posting even more rapid growth. To outpace debt, the gross domestic product (GDP) must grow by 6.5 to 7.5% this year and 7-8% between 2018 and 2022.

It is tough to be as upbeat as administration officials given the structural weaknesses of the economy and amid a global crisis. For this year, debt watchers and creditors put Philippine GDP growth at 6.4 to 6.8% – below the range being hoped for by the economic managers. That’s the most bullish the projections could get.

Whatever rate the GDP grows by, the budget deficit is sure to increase as government ramps up infrastructure spending. The plan is to let the budget shortfall climb to 3% of GDP as infrastructure spending reaches as high as 7.4% of GDP.

While a bigger deficit means greater borrowing, there is supposedly no need to be anxious as the Budget department claims they will borrow in a fiscally sustainable way. Eighty percent of the deficit would be funded by domestic debt and only 20% foreign. Such borrowing mix lessens foreign exchange risks that could cause public debt to balloon.

Chinese and Japanese loans

But a review of what the Duterte administration has identified as its flagship infrastructure projects tells a different story. To be sure, the flagships – numbering 75 as of June – are just a fraction of the more than 4,000 infrastructure projects that government plans to do. They nonetheless represent the largest ones in terms of cost and are the top priorities for implementation.

Of the 75 flagship projects listed by the National Economic and Development Authority (NEDA), 48 will be funded by foreign debt or official development assistance (ODA). Only 14 will be bankrolled through the national budget or General Appropriations Act (GAA). Just two projects are planned to be implemented via public-private partnership (PPP) while 11 have yet to be identified which mode to use.

As of June, only 53 out of the 75 flagships have estimated costs totaling PhpPhp1.58 trillion. Of the 53, 41 are ODA-funded projects worth Php1.40 trillion. The remaining Php181 billion would be funded through the GAA. In other words, almost 89% of the total cost of projects with already determined amounts will be paid for by foreign debt. (See Tables below)

Notes: ODA – Official Development Assistance; GAA – General Appropriations Act; PPP – public-private partnership; TBD – to be determined (Based on data from NEDA)

Just nine of the 41 ODA-funded flagship projects have identified donors/creditors, based on NEDA’s June list. These are Japan with three projects worth Php226.89 billion; China, three projects (Php164.55 billion); South Korea, two projects (Php14.06 billion); and World Bank, one project (Php4.79 billion).

The Chinese and Japanese are backing the Duterte administration’s largest mega-projects, an indication of how the two economic behemoths see “development cooperation” as one of the key arenas of their competition in the region. Japan is funding the Php211.46-billion PNR North 2 (Malolos-Clark Airport-Clark Green City Rail); Php9.99-billion Cavite Industrial Area Flood Management Project; and the Php5.44-billion Malitubog-Maridagao Irrigation Project, Phase II.

Meanwhile, China is bankrolling the Php151-billion PNR Long-haul (Calamba-Bicol); Php10.86-billion New Centennial Water Source – Kaliwa Dam Project; and Php2.70-billion Chico River Pump Irrigation Project.

Although not yet identified in the latest NEDA list, various media reports also link Chinese and Japanese loans to other big-ticket rail projects. These include the Php134-billion PNR South Commuter Line (Tutuban-Los Baños); the Php230-billion Manila Metro Line 9 (Mega Manila Subway Project – Phase 1); as well as the Mindanao Rail Project, of which the first phase (Tagum-Davao-Digos) costing Php35.26 billion will be funded via the GAA. (See Table below)

Source: NEDA

Download NEDA’s entire list here

Gains beyond interests

Over-reliance on debt is obviously problematic but by itself tapping concessional loans to build much needed infrastructure is not a wrong policy. Sadly, ODA is shaped not by genuine development cooperation but by the narrow agenda of lending governments and the corporate interests they represent. Thus, potential economic and social development gains for a borrowing country are greatly weighed down by bloated costs of ODA-funded infrastructure.

Big infrastructure lenders like China and Japan profit not only from the interests accruing from their loans to build rails and roads. The larger gains they make are from the conditionalities they tie to these loans such as requiring the Philippines to exclusively source from Chinese and Japanese firms the goods and services needed to build the rails and roads.

Lenders dictate the technology, design and construction of the infrastructure to accommodate their own suppliers and infrastructure firms. As such, Chinese and Japanese contractors are also favorably positioned to corner operation and maintenance contracts once the rail systems and other infrastructure are privatized under the Duterte administration’s hybrid PPP scheme.

Lastly, creditors also favor the development of infrastructure in areas where they have business interests. This explains the concentration of Japan-funded infrastructure in Central and Southern Luzon where export zones with Japanese investments are concentrated. China’s interest in building infrastructure in Mindanao is tied to its plantation and mining interests in the region.

All these make the cost of infrastructure development in the Philippines more expensive and the debt burden onerous. Tied loans for infrastructure development creates commercial opportunities for Japanese and Chinese companies that are otherwise not available to them. In China’s case, infrastructure lending in poor countries is even used to create employment for their own workforce at the expense of local labor.

At a time of prolonged global recession and slowdown in profit rates of the industrial economies, these opportunities become even more important. Alas, these opportunities only arise by undermining the debtor’s own development needs. ###

(This is a slightly revised version of an article first published as IBON Features)

Economy, Governance, Human rights, Military & war, SONA 2017

SONA 2017: Business interests with ties to Duterte to benefit from Martial Law extension

President Rodrigo Duterte with his Martial Law administrator Defense Secretary Delfin Lorenzana and implementor Armed Forces Chief General Eduardo Año (Photo from Al Jazeera)

As expected, the so-called supermajority in Congress granted the extension of Martial Law that President Rodrigo Duterte asked for. Martial Law would be in effect in Mindanao until the end of the year.

Malacañang said that with the extension, the country could now “get on with the job of nation-building and contribute in the attainment of the full promise of Mindanao.” The Duterte administration intends to “transform Mindanao into a land of fulfillment”.

How exactly Martial Law could contribute in “nation-building” is unclear. What is clear is that the 261 lawmakers who rubber-stamped the presidential request have further built up the nation’s fear of an authoritarian regime that Duterte wants to establish.

Martial Law in Mindanao and its extension could indeed be just a dress rehearsal and forebodes an of all-out fascist rule that Duterte and his Martial Law generals plan to unleash on the entire country.

Meanwhile, the “attainment of the full promise of Mindanao” pertains to the unrestrained exploitation of the region’s resources. Despite decades of corporate plunder, many areas in Mindanao are still not yet fully exploited.

Business interests with ties to the President appear to be among the beneficiaries of the extension of Martial Law in Mindanao.

Investment opportunities

The World Bank, for instance, in an August 2016 report said that: “Mindanao has 10 million hectares of land, of which 59.4% or 6.066 million hectares are classified as forestlands… if properly delineated, and rights are defined, can potentially increase the land inventory for large- scale investments.”

It noted that of the 6.07 million hectares of forestlands in Mindanao, only 700,000 hectares are covered by industrial forest management agreements, mainly by corporations. There are 700,000 hectares more that are still not covered by any form of tenure instrument. Another 400,000 hectares of public forests that are unclassified – all potential areas for big corporate investments.

In addition, of the remaining 4.14 million hectares of alienable and disposable (A&D) lands in Mindanao, a huge 2.24 million hectares have not been covered by the Comprehensive Agrarian Reform Program (CARP). These millions of hectares of forest and A&D lands offer enormous opportunities for investment and profits.

“If we push for massive agri investments in Mindanao, we need to start looking at the availability of these lands for consolidation to achieve economies of scale,” said the Mindanao Development Authority (MinDA), a government body created to among others promote and facilitate investments in the region.

Under the Duterte administration, MinDA and the Philippine Economic Zone Authority (PEZA) are also working to fast-track the Mindanao Ecozone Masterplan. The plan will develop existing and new economic zones around Mindanao to increase trading activities and attract more foreign investments.

There are 81 accredited ecozones in the region covering agro-industry, manufacturing, information technology and tourism. The Duterte administration is currently conducting an inventory of areas in Mindanao that can be developed as “ecozone cities”.

But many of these supposedly idle areas or available lands are actually occupied by lumad and peasant communities. Their firm resistance and the strong presence of the New People’s Army (NPA) are the biggest obstacles to the massive expansion in Mindanao of corporate plantations, big mining companies, and export-driven industrial enclaves – and the construction of hard infrastructure to support their operation.

The resistance is not against development but against the land and resource grabbing and massive displacement of local communities that often accompany big-ticket investment projects in Mindanao. That is why the NPA, and the lumad, farmers and farmworkers are the real targets of the extended Martial Law in Mindanao.

Big business interests

Indeed, Duterte’s Martial Law is apparently more about providing security to big investors who want to further exploit Mindanao. And it appears that the business sector feels encouraged by the strongman rule that Duterte is imposing. The organizers of the recently held Davao Investment Conference (ICON), for instance, reported record-breaking confirmed attendance, including about 100 foreign investors.

In an earlier report, the organizers said ICON participants include the country’s biggest conglomerates like San Miguel Corp. (SMC) as well as 30-40 “big Chinese investors”, among others.

SMC and the Chinese are among those most aggressive in expanding in Mindanao particularly in establishing vast plantations and constructing infrastructure. Chinese investors have been reportedly discussing with the Duterte administration the possibility of a 6,000-hectare tea plantation in a territory controlled by the Moro Islamic Liberation Front (MILF).

Duterte has been actively seeking Chinese patronage, mainly in the form of official development assistance (ODA) or loans as well as military assistance. Among those that the administration is pitching to China are multi-billion infrastructure projects in Mindanao including expressways, coastal roads, seaport and airport development, and the Mindanao railway system.

On the other hand, SMC (together with Malaysia’s Kuok Group) is developing about 18,495 hectares of forestlands covering four Davao del Norte municipalities for oil palm production. Just last August 2016, SMC also opened a 2,000-hectare industrial estate in Malita, Davao Occidental that also has a 20-meter deep seaport that can accommodate container vessels.

Earlier, the conglomerate was reported to be looking at a total of 800,000 hectares of lands for development as commercial farms in Zamboanga del Norte, Zamboanga Sibugay, Sarangani, Davao del Sur, South Cotabato, North Cotabato and Agusan del Norte.

Of course, SMC’s top man Ramon S. Ang is known to be “close” to Duterte. The SMC president was among Duterte’s campaign contributors in 2016 giving an undisclosed amount and perhaps other forms of support as Ang wasn’t even listed in the official Statement of Contributions and Expenditures (SOCE).

Ang also offered to buy Duterte a private jet (worth as much as US$65 million) that he could use as President while donating Php1 billion to the Chief Executive’s pet campaign, the war on drugs.

Meanwhile, Duterte’s former campaign spokesperson and Irrigation chief Peter Laviña and his group Philippine Palm Oil Development Council Inc. has been reportedly lobbying the government since Aquino’s time to develop at least 300,000 hectares of Mindanao lands for palm oil production targeting MILF territories as well as CARP and lumad lands.

These are some of the big business interests in Mindanao that stand to benefit from the state repression of local communities opposed to their operations. Apparently, Martial Law is more than what President Duterte, his Generals and their allies in Congress are telling us. ###

Global issues, Military & war

Trump builds ‘legitimacy’ thru bombs and war-making

Photo from trofire.com

When Donald Trump surprisingly clinched the US presidency, the legitimacy of his regime has been challenged from the onset. Rival Democratic Party, with the apparent help of the Central Intelligence Agency (CIA), immediately launched a campaign to delegitimize Trump.

Even within his Republican Party, there seems to be mistrust on Trump to pursue traditional US foreign policy, which since 9/11 has been largely defined by the neoconservatives (i.e., advocates of preemptive wars, among others).

The reason? Trump’s stance on Russia and his overtures of normalizing relations with the US’s longtime adversary during the campaign. Trump’s position reflects the agenda of the monopoly capitalist clique he represents such as a faction of Big Oil that is willing to cooperate more with Russia for its vast oil and gas resources.

One of them is Exxon Mobil, which has a mammoth $500-billion oil deal with Russia. President Barack Obama blocked the deal as one of the sanctions against Russia for its role in Ukraine. Improved US relations with Russia would allow Exxon Mobil to exploit oil from almost 26 million hectares of Russian land, said to be five times the size of what America’s largest oil company has in the US.

But normalized US-Russia relations aren’t as simple, of course. It requires a shift as well in US foreign policy towards Russia’s biggest allies Iran and China, something that even Trump himself is unwilling to do. A policy shift in Iran would greatly compromise the US long held agenda to remain in control of Middle East oil while it will not give up Asia Pacific and its massive market, vast resources and strategic sea-lanes to China.

De-escalating a lucrative New Cold War amid a prolonged economic crisis also doesn’t sit well with the military-industrial and security complex, which profits out of war and the threat of war that is constantly driven by the endless competition among monopoly capitalists to divide the world.

The controversies and predicament that Trump faces simply show the deepened contradiction among the competing big interests in the US and imperialism’s increasingly convoluted geopolitical agenda.

Picking up the momentum of the Democratic Party’s propaganda that Moscow hacked the US elections to benefit Trump, the billionaire President has been depicted as a Kremlin stooge by the CIA-fed corporate mass media. A leaked wiretapped conversation with a Russian diplomat of Trump’s national security adviser Michael Flynn, who was since forced to resign, further fired up anti-Moscow hysteria as the Federal Bureau of Investigation (FBI) and several congressional bodies investigate the alleged Trump-Russia collusion. Trump knew that the campaign to destabilize his fledgling regime was real; that a domestic CIA “regime change” operation is likely already ongoing.

In this regard, Washington’s swift decision to drop 59 Tomahawk missiles on a Syrian airbase is more about Trump trying to preserve his presidency than retaliating (in the name of “small children and beautiful babies” killed) against a supposed chemical attack by the Russia-backed Assad regime. The message that the Trump retaliatory attack (which reportedly killed nine civilians, including four children) tried to convey was clear: explicitly, the “bromance” with Vladimir Putin is no more and implicitly, the happy days for the lucrative war making business are far from over.

Trump’s self-serving intention in directly bombing Syria only serves to amplify the brutal criminality of US military intervention and war of aggression in that country and region that has already claimed thousands of innocent lives. In March alone, there were reportedly 1,472 innocent civilians killed in Syria by US-made and delivered bombs.

Amid the corporate media hysterics, a more reasonable action by Trump – like supporting Moscow’s call for a prompt and serious probe even as it claims that Assad’s opponents were the ones in possession of the nerve gas – could be easily interpreted as further proof that a Kremlin puppet is in the White House. Instead, Secretary of State Rex Tillerson hints that a regime change in Syria is now back on the agenda even if it aggravates the tension with Russia.

Trump is on the offensive to reverse the campaign to undermine his presidency by rallying the entire monopoly capitalist state machinery behind a campaign to reassert US global power and dominance, including through reckless saber-rattling and military adventurism that court all-out nuclear war.

He followed up his action against Syria with the much publicized bombing of an ISIS cave and bunker complex in Afghanistan with the so-called “Mother of All Bombs”, the largest non-nuclear weapon in the US arsenal. It was a “shock and awe” display and ruthless projection of US firepower, which is meant to send the message that it is business as usual for US imperialism and that Syria, North Korea, China, Iran, even Russia and others that threaten US interests should take notice.

After bombing Syria and Afghanistan, Trump then deployed the nuclear-powered USS Carl Vinson aircraft carrier and its group of battle warships off the coast of the Korean peninsula in an attempt to bully North Korea to stop its recent missile tests.

It remains to be seen how Trump’s more aggressive military posturing abroad will favorably impact on his shaken legitimacy at home. What is clear is that this will increase the stake for the US to meddle more in countries that play a key role in promoting its interests and agenda in the region and the world.

How such greater foreign intervention would translate in the Philippines is something that must be closely watched as the Duterte administration tries to negotiate a peace pact with the revolutionary groups that pose the biggest threat to US imperialism in the country – the Communist Party of the Philippines (CPP), the New People’ Army (NPA) and the National Democratic Front of the Philippines (NDFP) –– and starts to forge closer bilateral ties with US rivals China and Russia.

Already, pro-US forces, including several of President Rodrigo Duterte’s own men, have been relentlessly undermining the peace talks with the Left while ensuring that US military presence in the country remains strong.

But the situation also presents a good opportunity for Duterte to show that his independent foreign policy is beyond mere rhetoric by asserting national sovereignty and interest over the US’s imperialist agenda. ###

Global issues, Military & war

US agenda in Asia and the risks that Aquino is courting

Officials say the Philippines needs more US troops to counter China's "bullying", but is it really for the national interest? (Photo from inquirer.net)

Manila and Washington have both denied that the bilateral strategic dialogue between their senior diplomats and defense officials last week intends to bring back permanent American military bases in the Philippines. The talks, they said, is just meant to explore increased US military presence in the country such as conducting more joint exercises and rotating more American troops.

Officials said that the threat posed by China to both countries justifies the direction that the dialogue aims to pursue. The US State Department declared that protecting the freedom of navigation in the South China Sea is an interest shared by the Philippines and the US. Its Defense Department said that they want to discuss how America’s enhanced posture in Asia can be useful to the Philippines. Meanwhile, for our Department of Foreign Affairs (DFA), “we need to have a good neighbor on the block” so that the country can no longer be bullied by China.

What’s driving America’s renewed interest in Asia? Is it really for the national interest to play an eager part in the US agenda in the region? Or is the Aquino administration courting undue risks by hosting heightened US military presence and upping the ante in the country’s territorial dispute with China?

Economic crisis drives US pivot to Asia

The expanded military cooperation with the Philippines forms part of Washington’s “pivot” to Asia, as State Secretary Hillary Clinton called the shift in US focus from Afghanistan and Iraq to Asia, where “the future of politics will be decided”. This pivot is being driven by the ever worsening crisis of global capitalism of which the US is the center. In an essay entitled America’s Pacific Century in November last year, Clinton wrote that Asia will yield the biggest returns in US investments at a time when the country is facing a severe economic crisis. Clinton described Asia as central to US economic and strategic interests with its vast markets and investment areas crucial to its own economic recovery.

Under the Obama administration, the US has been steadily laying the groundwork for a reinvigorated American economic clout in Asia. In last year’s Asia Pacific Economic Cooperation (APEC) meeting in Hawaii, President Barack Obama was able to secure wide support for the US-sponsored Trans-Pacific Partnership (TPP) deal to enhance US free trade and investment with the region. The agreement, which the Philippines will soon join, is expected to be finalized this year. Its increasing economic interests in Asia thus necessitate the refocusing of US military projection in the region.

Expanded military ties

The Philippines, along with Japan, South Korea, Australia and Thailand, have long maintained treaty alliances with the US. But the ascent of China as an economic behemoth has posed new challenges for American interests in the region. China is being depicted as having the greatest potential to compete militarily with the US and a threat to the freedom of navigation in the South China Sea, which for the first time is being considered as a matter of US national interest. Thus, as Clinton wrote, there is a need not only to sustain but to “update” US’s existing alliances which will serve as the fulcrum of its pivot to Asia. This entails the expansion of existing military cooperation and forging new ties for defense and security.

When finalized, the deal with the Philippines will follow improved US military arrangements with other long-time allies like Australia and Singapore. The pact with Australia allows the US to station up to 2,500 Marines in a military base in Darwin while the deal with Singapore will let it station combat Navy ships for forward deployment. The US has been building up as well its military relations with Vietnam through joint naval exercises, and in August last year, the former Cold War foes forged their first formal military deal. It is also aggressively pursuing new bilateral ties including even with Burma, which Clinton visited last December – the first trip by a US Secretary of State in more than half a century.

US priorities for 21^st century defense

Updating existing military alliances and forging new ones, however, have to be pursued in the midst of the harsh economic realities facing the US. Amid its raging public debt crisis that has been caused in part by costly wars in Iraq and Afghanistan, the Obama administration released this month its latest defense strategy document Sustaining US global leadership: Priorities for 21^st century defense. The document was the result of “an assessment of US defense strategy in the light of the changing geopolitical environment and changing fiscal circumstances”.

Consequently, the latest US defense strategy calls for developing “innovative, low-cost and small-footprint approaches” to achieve US security objectives, relying on bilateral and multilateral training exercises, rotational deployments and advisory capabilities. This will allow US forces to “conduct a sustainable pace of presence operations abroad” and at the same time let it commit to a large-scale operation in one region while still having the capability to impose “unacceptable costs” on an aggressor in a second region. But given its reduced resources, the US needs to make thoughtful choices on the location and frequency of these operations. As mentioned, Asia is high on Obama’s list of security priorities. Apparently referring to the South China Sea, the defense strategy reaffirmed US commitment to “assure access to and use of global commons by maintaining relevant and interoperable military capabilities”.

Economic sanction

News of expanded PH-US military cooperation earned strong condemnation from Global Times, one of the mouthpieces of the Chinese government. In its editorial Make Philippines pay for balancing act, the broadsheet denounced the Philippines for inviting more US troops and increased presence by using the territorial dispute in the South China Sea. It called for well “well-measured sanctions” against the Philippines and “make it ponder the choice of losing a friend such as China and being a vain partner of the US”. Global Times proposed that China “consider cooling down its business ties with the Philippines”.

While not an official policy statement of the Chinese government, what the Global Times editorial said is not an empty threat. It underscored one of the risks that come with Aquino’s excessively pro-US foreign policy. The export-oriented Philippine economy has seen the demand for its products abroad decline amid the raging global crisis, substantially slowing down gross domestic product (GDP) growth. Philippine exports have contracted by 5.6% from January to November 2011 with exports to the US, which is at the center of the crisis, falling by 6.2 percent. On the contrary, amid the contraction in exports to the US, exports to China remained robust, growing by almost 9.9% during the same period.

False sense of security

More importantly, increased US presence presents a continuing risk to the country’s national sovereignty and its people. The Visiting Forces Agreement (VFA), which Filipino and American officials said will remain the basis of expanded military cooperation, has allowed the virtual permanent basing here of as many as 600 US soldiers that for legal experts and some legislators is an infringement of the 1987 Constitution. Several cases of human rights violations and other abuses involving American troops have been reported including the highly controversial Subic rape case.

And worse, while the Philippines is willing to face these risks, Aquino is clinging to a false sense of security by inviting more American soldiers and more US military ships in the country. Last year, the US embassy in Manila clarified that the US “does not take side in regional territorial disputes” in reaction to a Malacañang statement saying that Washington will surely honor its commitment with the Philippines and come to the aid of the country in case a military conflict erupts in the South China Sea. Instead, the US will simply arm the Philippines by selling it “affordable military hardware” so that it can “defend itself”. Ironically, the possibility of an actual military conflict with China is being stoked by aggressive projection of US military might in the region in connivance with the Aquino administration, putting the country and our people at risk.

In the end, the question is not which party to side with, but how the Philippines can best protect its territorial integrity. It is not in our interest to play a willing part in US military maneuverings in the region. If there is a perception that China is bullying us, the solution is not to run for help to a bigger bully. Diplomacy within the framework of mutually beneficial relations with our neighbors in the region should be our utmost weapon. Clearly, the best foreign policy is one that is anchored on the assertion of national sovereignty and not one that relies on a Big Brother to protect the country’s interests. #

A Radical's Nut

Notes on Philippine economy and politics

Tag Archives: China