10.05.2019 | The great hedge: why the Philippines is mending fences with the US

Worried by Chinese militarism, President Duterte turns to an old ally for support.

Click here to read the Alaco article in Frontera News.

 

Philippines president Rodrigo Duterte is repairing ties with the US in an apparent hedge against increasingly troubling relations with Beijing whose undelivered promises of massive investment in infrastructure projects and growing assertiveness in the South China Sea have raised questions among Filipinos about the merits of the country’s pivot to China.

Soon after the mercurial Duterte came to office in 2016, he turned his back on long-time ally Washington apparently over criticism of his human rights record, embracing regional rival China. Beijing rewarded his about-turn with trade openings and some $24 billion dollars worth of investment and loan pledges, bolstering the President’s much trumpeted ‘Build, Build, Build’ infrastructure programme, comprising 75 flagship projects, including roads, railways, ports and airports.

In a quid pro quo, Duterte, who has previously joked that he would be happy to see his country becoming a province of China, played down a Hague international arbitration tribunal ruling invalidating Beijing’s claims to sovereignty over most of the South China Sea, a major international shipping lane, through which over $5 trillion of trade passes annually. The case had been brought by Duterte’s predecessor Benigno Aquino, concerned over Beijing’s encroachment into disputed Filipino waters, rich in fisheries and energy reserves.

As well as strategic gifts, Duterte offered cultural and economic inducements in his bid to consolidate relations with his new best friend in the region. Chinese tourists were offered visas on arrival. They are now the biggest visitors; the Nikkei Asian Review reports last year’s figure of 1.26 million was close to triple that for 2015. Moreover, it says nearly 340,000 work permits and working visas were issued to Chinese nationals between 2016 and 2018, over half the total granted to foreigners.

But Duterte’s alliance with Beijing has not played well at home. Chinese are perceived by some to be taking Filipino jobs, working illegally and driving up property prices. The backlash comes at a time when a fifth of the population live below the poverty line and similar numbers are underemployed, despite the country’s impressive levels of growth of around 6 per cent, one of the fastest-growing rates in south-east Asia.

There has also been frustration with the Chinese over their investment pledges. Of the ten proposed big-ticket projects that they agreed to fund, only one reportedly looks set to proceed – yet there are already signs that Filipino politicians are worried about the risk of China acquiring commercial assets should the country default on its loans, a fate that has already befallen Sri Lanka, which handed control of a port to China in a debt for equity swap.

Government critics point out that in any debt settlement dispute China would have the upper hand because a Beijing-based arbitration commission would adjudicate. Officials’ insistence that foreign debt was “very manageable” and that Chinese loan deals are rigorously scrutinised and cheaper than borrowing from the private market or multilateral banks does not appear to have allayed concerns.

Such is the mistrust that some opposition Filipino politicians railed against an agreement between the two countries last November to cooperate jointly on energy exploration in the South China Sea. Beijing speaks of mutual benefit, yet its actions in recent month have suggested that it is prepared to pursue its own interests in the waterway – where it has built, and subsequently militarised, artificial islands over many years – whether Manila agrees or not.

The Philippines has long been critical of what it sees as China’s offensive actions in the South China Sea, which have included the deployment of anti-ship and surface-to-air missiles and electronic jamming devices. And polls show the vast majority of Filipinos want their government to oppose such military build-ups. Yet Duterte has been reluctant to confront the Chinese, which critics say has only emboldened them.

Last May, however, the Philippine foreign ministry declared that it had warned Beijing not to overstep several red lines, namely unilateral energy exploration in Philippine waters, construction work on the disputed Scarborough Shoal or threats to Philippine naval personnel and vessels in the region. Then in April Duterte, perhaps with an eye on midterm elections on May 13, upped the ante. He threatened to send his troops on “suicide missions” if scores of Chinese vessels, including naval ships and fishing boats, spotted close to a Philippine-occupied island in the contested Spratly Island Chain did not “lay off”.

Against this background of rising tensions, Duterte has been quietly repairing relations with the US, focusing on security cooperation in an apparent effort to assuage public and security personnel concerns about China. Joint military exercises have been expanded, with this year’s schedule in line with the level of operations prior to Duterte’s ascent. And the two countries will reportedly start preliminary talks on a trade agreement this year, given added impetus by the Sino-US trade war.

Under President Trump, America has become much more assertive in East Asia, increasing freedom of navigation missions and military aid to regional allies. As the Philippines only treaty ally, America can best protect Manila’s sovereignty in the South China Sea. Indeed, in March 2019 US Secretary of State Mike Pompeo reaffirmed his country’s treaty commitments, declaring it would come to the Philippines defence if its aircraft or ships were threatened in the waterway.

But it would seem Duterte’s improving ties with the US is less a pivot back to Washington than an attempt to balance his country’s relations with the two powers. Though it has been tardy, China will remain a key source of funding for his infrastructure programme while with the Americans at his side Duterte will hope to find a way of countering Beijing’s territorial ambitions.