Selling out PH sovereignty and patrimony for conditional Chinese money

In exchange for conditional loans that benefit Chinese banks and corporations, 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.

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(Image from CNN Philippines)

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)

ODA flagship projects under Duterte Jun 2017

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”

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 21st 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 21st 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. #