Permanent Court of Arbitration

RIDING THE PROWLING CHINESE DRAGON: China’s Economic Hold in the Philippines

Published on November 21, 2020 in Countercurrent

“This is the Chinese Coast guard. This is under the jurisdiction of the Chinese government,” blared a Chinese officer who tried to bar a cargo ship from sailing through Panatag/Scarborough Shoal, a part of the Philippine territory off Zambales province in the South China Sea. His action has sparked an outcry, but as of this writing, the Duterte administration continues to avoid offending China.

Its officials—from Malacañang to the Foreign Secretary to the Philippine Coast Guard— have all refused to call out China’s infraction on Philippine sovereignty and on freedom of navigation. Meanwhile, at a Senate hearing around the same period, Defense Secretary Delfin Lorenzana stirred patriotic outrage when he downplayed the Chinese ships’ firing of flares as Philippine ships navigated the West Philippine Sea.

These are just two incidents in a series of cases of Chinese incursions into Philippine territory, all unchallenged, being dismissed, and at times even justified by the Duterte regime. Why would a tough-talking and cursing president, who advertises his stance as “charting an independent foreign policy,” court the people’s ire with blatant subservience? Perhaps, this question should begin with “How much…?”

An imperialist puppet’s gamble for bureaucratic loot

The first time President Rodrigo Duterte visited China three years ago, the Communist Party of the Philippines (CPP) already enumerated ways in which the Filipino people may benefit from ties with China. This would start ONLY IF Duterte strives to build diplomatic relations with China on the basis of equality, mutual respect, and mutual benefits, the CPP said at the time.

But Duterte did not listen. Instead he has shown that he is not at all capable of building diplomatic relations with China on the basis of equality, mutual respect, and mutual benefits. He has persistently desisted from asserting the country’s victory at the Permanent Court of Arbitration in The Hague, claiming China would wage war against the Philippines if he did so (which has no basis in fact). Thus, he has let pass China’s repeated incursions into our country’s extended economic zones (under the United Nations’ Convention on the Law of the Sea or UNCLOS) and bully Filipino fishers at Panatag Shoal.

Probably believing that in the prevailing system, presidents like him couldn’t be anything other than the worst imperialist puppets and bureaucrat capitalists of the day, Duterte is angling for whatever gains he could get from deals with the imperialists. His administration calls China an “integral partner” in their P4.23-trillion infrastructure buildup.

By now it is clear the only change that has come with Duterte is that besides serving US imperialist interests (while feigning to be distancing from it), his administration is moonlighting with another imperialist power, letting it latch on to wherever it can partake of the country’s riches and potentials.

The country’s foremost bureaucrat capitalist finds in China a promising huge pot of bureaucratic loot as former sources have dried up due to the economic slowdown, or are compelled by their citizens to raise questions on and denounce continuing extrajudicial killings and other human rights violations under his increasingly tyrannical rule. On this issue the Duterte administration is allergic to what he deems as foreign intervention.

“Duterte is in a hurry and desperate to secure his kickbacks from foreign loans and contracts from China,” the CPP said in a statement when Duterte still had three years in power. Duterte’s list of projects, flagship or otherwise, has since continued to evolve or get revised.

After three years in power, only nine of Duterte’s 75 listed “Build, Build, Build” projects begun construction. By November 2019, Duterte dropped the projects considered too long or unfeasible. It ‘overhauled’ the list such that only 30-plus of the original projects remained, and added another 68 to the “evolving” list. Half or 50 of Duterte’s flagship infrastructure projects will be funded by Overseas Development Assistance (ODA) or foreign loans, 23 are to be fully funded by the Philippine government, 24 by public-private funding, and only two will be privately financed.

Duterte’s panic over delayed delivery of the loot is palpable. Past midway in his six-year term, the amount supplied so far by China in loans and grants is still far short of the US$9 billion promised by President Xi Jinping during their first meeting in October 2016. Having already signed numerous deals with the Chinese government, his administration wants to proceed with implementing the projects ASAP so the funds could start pouring in. That can happen, of course, only if his administration can overcome the public criticisms and protests over the lopsided provisions of the deals that have been made public, criticisms for the lack of transparency on deals that have yet to be disclosed, and delays in completing the technical and legal requirements that include feasibility studies, environmental clearances, and the freely given consent of communities that would be adversely affected.

A sample of what the Duterte administration can do to push its deals with China: in time for the visit of Chinese vice-premier Hu Chunhua in October 2019, it railroaded the release of environmental compliance certificate and threatened to use police power against public protests on the Kaliwa Dam project in Sierra Madre. Yet, the protests were such that as of February 2020, his economic manager confirmed they have barely started construction in Kaliwa.

Protests against the China-funded projects hinder its implementation. Past debacles with China-funded projects such as the ZTE and Northrail also cast its shadow, slowing down Duterte’s hope for inflows of ODA from China. Until December 2019, the Chinese government wanted meetings with the Duterte government “to thresh out issues involving the Duterte regime’s big-ticket infrastructure and development projects that are being implemented with funding support from China.”

To push through with the projects Duterte needs to remove all constraints including protests. His government has busied itself imposing a de facto martial law since establishing the National Task Force to End Local Armed Conflict (NTF-ELCAC) in December 2018, ordering to place civilian bureaucracies and local governments under the task force.

But Duterte cannot trample on the people’s rights and welfare on the way to collecting his loot and still maintain his dubious popularity. To deceive supporters, he is passing off his “China pivot” as “independent foreign policy.” He is also using it as leverage for demanding more support and funds from the Philippines’ long-time neocolonial master, without really upsetting the established “special relationship” with US imperialist overlords.

In fact, as a US puppet, Duterte is providing exemplary services to his master. He sets the stage for the Pentagon and the Department of National Defense-Armed Forces of the Philippines to use the China card to both increase and extend US military presence in the country. The US has been allowed to have another military facility, this time within a Philippine Air Force base in Palawan. Under Duterte, the US military and the AFP have also conducted an increasing number of war exercises designed to counter China’s military build-up in the South China Sea.

“The aim of these exercises is to ensure that the US will remain militarily dominant in order to protect its economic interests in the Philippines and across the region,” the CPP said in a statement during the Kamandag US military exercises in October 2019.

As president and “public servant,” Duterte continues to expose himself as a total scam. And so, to block protests and increasing calls for his ouster while he strives to make his puppetry to US and China more profitable for himself and his clique, he continues to militarize the bureaucracy and the entire government.

In 2019 his government allowed a military rampage nationwide on the basis of their ‘whole of nation approach’, a harsh and more insidious martial law than that carried out for 14 years by the ousted fascist dictator Ferdinand Marcos (whom he has politically rehabilitated by allowing his preserved corpse buried at the Libingan ng mga Bayani in 2017).

Enter the dragon: World’s No. 2 power develops its own stranglehold in PH

The Duterte regime has looked the other way as China finished reclaiming and installing military installations over three reefs within Philippine territorial waters. Duterte has all but given the green light to China’s staking claim and proceeding with plans to construct more installations at the Panatag Shoal. He is all but allowing also what amounts to China’s military encirclement of the seas around Luzon, sans any written treaty.

Commercially, China is also gaining humongous ground with the lopsided “joint” deal it signed with Duterte to explore and drill for oil in the resource-rich West Philippine Sea. Officials from the Duterte regime and China are meeting regarding the “joint” oil exploration.

The increased Chinese presence in Philippine coastal areas, islands and waters has placed fisherfolk and urban communities at a grave disadvantage. China’s aggressive grab of Filipinos’ traditional commercial fishing grounds has worsened the fisherfolk’s lot.

Not just in Philippine reefs and seas, China is also boldly entering vital Philippine industries and staking claim over rich natural resources in ancestral territories of indigenous peoples through opaque or lopsided deals with Duterte. As earlier stated, China’s actual fund release in Duterte’s big-ticket “Build, Build, Build” infrastructure projects is so far negligible. But the projects where it is bound to come in, per the deals already signed, and where other private and state-controlled Chinese firms are coming in are many times bigger and more dangerous than the NBN-ZTE deal for which Gloria Macapagal-Arroyo got burned late in her disputably prolonged nine-year term.

Some of the strategic industries where China loans or investments have come in or are in the pipeline include energy (China already owns as much as 40% stake in the National Grid of the Philippines), telecommunications (Dennis Uy’s Mislatel/Dito Telecommunity), water, heavy railways, and various infrastructure projects such as bridges and highways, real estate development including economic zones and islands to be devoted more or less exclusively for Chinese business and gambling operations.

These businesses being opened to China may be par for the course for any imperialist puppet, but Duterte is adding more, “industries” and “trading” such as gambling and drugs. Given Duterte’s red carpet for China, the Philippines has been putting up dens for gambling operations for mostly Chinese operators. Duterte, who has been publicly known as friendly to Chinese drug lords, has also repeatedly been implicated in the illegal drugs trade. The CPP describes him as the overlord of illegal drugs trade in the country.

For now, Duterte has already shown how he has been selling out the country and committing high treason. While Duterte is not the first Philippine puppet president to have entered into lopsided deals with China, his regime surely leads in ramping it up. ###

Enter the Dragon: CHINA-DUTERTE REGIME? NOT QUITE YET

Published on October 2, 2018 in Mainstream

by Vida Gracias

There is a growing perception that President Rodrigo Duterte is already distancing his administration from the United States and increasingly cozying up to China. Is it now apt to assume that a China-Duterte rather than a US-Duterte regime is shaping up?

Consider the following:

Duterte has indefinitely set aside the Permanent Court of Arbitration’s August 2016 ruling that upholds the Philippines’ sovereign rights over its exclusive economic zone (EEZ) in the West Philippine Sea and negates China’s so-called nine-dash-line sovereignty assertion over almost the entire South China Sea.
The Duterte government has not protested China’s rapid construction, militarization, and occupation of artificial islands within the Philippine EEZ, largely seen as a “creeping Chinese invasion.”
Duterte is also practically conceding to China a large part of the country’s oil, gas and other natural resources in the West Philippine Sea through an offer of joint exploration with a 60(Philippines)-40(China) sharing arrangement.
While China has supposedly agreed to grant the Philippines billions of dollars in loans and aid, this entails us paying an interest rate 3,000% higher than what Japan has offered.
A large influx of Chinese nationals has been entering the country, many of whom have been caught engaged in the illicit drug trade, online gambling and other dubious activities.
Duterte has repeatedly been publicly quoted as declaring: “I will not go to war with China.” He has even joked about the Philippines “turning into a province of China”. He continues to regard China’s leader Xi Jinping as a “man of honor” even as the latter has reneged on his promise not to build military structures on the contested reefs in the West Philippine Sea.

Undoubtedly China is a rising imperialist power challenging the U.S military and geopolitical dominance in the Asia-Pacific region, with designs over the Philippines not just to exploit its natural resources, trade and investments but also its strategic geographic location in the region.

China is delighted that Duterte has opted to develop warm relations with it, in contrast to his predecessor, Benigno Simeon Aquino III, who took China to court over the maritime disputes in the West Philippine Sea. However, more than two years into the Duterte presidency, and despite China’s increasing economic influence here, it is quite far from dislodging the US as the No.1 imperialist power in the country’s internal and external affairs.

The fact remains that, for all his bluster about pursuing an “independent foreign policy” and “breaking relations with the US,” Duterte, along with his pro-US cabal of economic and security advisers, remains the reliable chief puppet of US imperialism. His tirades and insults against the US sound no more than the cry of a spoiled brat, resenting the latter’s criticisms of his bloody “war on drugs” and tying up measly military assistance with human-rights conditionalities, against which he is most sensitive.

Duterte’s overtures to China and Russia – both welcomed with open-arms by the latter hitherto “enemy” powers — are calculated and calibrated risks at the expense of Philippine sovereignty. He is currying favors from the two powers to gain more support in both his bid to build up his regime’s military capability and to expand trade relations. It may appear that he is playing off one imperialist power against another, but shrewd Duterte knows where his bridges could be burned.

He cursed former US President Barack Obama, calling him “son of a whore,” because the latter had criticized his brutal war on drugs. He reacts vehemently whenever his dismal human rights record is riled, then threatens to veer away from the US (“I will scrap the VFA and EDCA!” “Out with the American Special Forces in Mindanao!” “Stop the Balikatan exercises!”). He would rake up old hurts, both personal (“I was abused as a child by an American Jesuit;” “I was not allowed entry by US immigration”) and political (“Return the Balangiga bells!” “Remember the Bud Daju massacres!”).

U.S. MILITARY ASSISTANCE

Yet, when US President Donald Trump came into power and praised Duterte, the latter’s verbal attacks started to wane. Trump promised Duterte increasing military assistance under the recycled “Operation Enduring Freedom” of George W. Bush, renamed as “Operation Pacific-Eagle Philippines.”

This came at about the time US military planes and drones provided aerial-bombing “assistance” in the five-month Marawi war beginning in March 2017, far eclipsing the China aid of 2,000 AK47 rifles, and for which Duterte was fulsomely grateful. This gave the US further reason to intervene in Duterte’s “anti-terrorist” campaign and revved-up counterinsurgency program. The succeeding days saw Duterte canceling the GRP-NDFP peace talks and the AFP carrying out an “all-out war” against the CPP-NPA.

Quite a number of times during Duterte’s two-year rule, the US turned over loads of war materiel (carbines, pistols, machine guns, grenade launchers, etc.) to fight terrorism and insurgency. Its US Special Forces have remaained in Mindanao since 2009, disregarding Duterte’s pronouncements in 2016 that they should leave. Obviously, while Duterte’s foul mouth and downgrading of the US may have ruffled some feathers, US officials didn’t take his outbursts seriously.
Because beneath his rants run long-held institutional ties and abject Philippine subservience to the US, Duterte cannot feign ignorance of US control over the Armed Forces of the Philippines. Since its inception, the AFP has been trained, armed, and aided by the US. US military presence dates back to 1898 and continued after the US “grant” of Philippine independence in 1946. The 1951 US-RP Mutual Defense Treaty remains in effect.

“From January 1, 2017 to the present, US grants funded the delivery of military equipment worth over Php 5 billion (U$95 million) to the Armed Forces of the Philippines,” the US Embassy was quoted in an Inquirer.net news report on August 16. The military equipment included unmanned aerial vehicles, armored vehicles and planes, surveillance platform for the military’s C-130 cargo transport planes.

In the same news report, the US embassy claimed, “The Philippines is by far the largest recipient of US military assistance in the region (Asia-Pacific), supporting the AFP’s modernization goals through a variety of programs and initiatives.”

Before Duterte cuddled with China, his patriotism was suspect. While lambasting the US he took no action to scrap the Visiting Forces Agreement (VFA) and the Enhanced Defense Cooperation Agreement (EDCA), as he had vowed to do. By their own account, about 8,000 US troops and Filipino soldiers participate in the annual Balikatan exercises as part of these agreements. Though the Supreme Court has upheld these agreements as constitutional, it is within his executive powers to initiate their termination. He can also coax his allies in the Senate to facilitate the process.

Duterte may appear like he is his own person but the US surely gets its way and sets the direction of his administration’s policies. Oftentimes he would rely on his national defense chief, his national security adviser and his coterie of generals for decisions such as the bombing of Marawi, the declaration of martial law in Mindanao, and the termination of the peace talks with the NDFP. He has also publicly acknowledged that the security cluster in his cabinet, including his economic team, are “AmBoys” and that he does not interfere in their work.

The American presence is all over town, so to speak, and most potent in the military. The US holds the largest military complex in all of Southeast Asia. No other imperialist country, not even China, can match it for now. Even in the economic arena, China’s strength in the Philippines has yet to be felt compared to other foreign trade and investment partners. What Duterte achieved in his trips to China and meetings with Xi Jin Ping are still mere pledges and agreements. Though worth billions of dollars, these have yet to come to fruition.

NEOLIBERAL POLICIES

While the US has become only next to Japan in terms of trade and investments in the Philippines, US interests are substantial enough to effect the further liberalization of the economy.

From 2007 to 2017, US investments in the Philippines amounted to US$4.26 billion compared to China’s US$84.74 million. Direct trade with the US also reached US$168.58 billion from 2006 to 2016. In May 2018, Forbes.com reported no major investments by China in the Philippines despite warm relations. The bulk of investments in 2017 came from traditional trading partners such as US, Japan and the Netherlands as well as Singapore and Hong Kong.

Trump’s meeting with Duterte in Manila last year also kicked off negotiations for a bilateral free trade agreement between the two countries. This comes along well with the charter change proposals pending in Congress to lift economic restrictions for foreigners such as granting them 100 percent ownership of land and public utilities.

With the US holding a tight grip on the country, specifically on the military, Duterte can only remain subservient to US imperialism. The regime will remain US-Duterte whether or not it suits him. He can trash talk the US all he wants, but any false move risking relations with the imperialist power could cost his presidency, even his life – as he himself has been saying lately. He could go on playing his China card against the US, but this won’t change his being a chief US puppet. Yet it can make him a China lackey, too.

If he pursues his double-dealing scheme, he would also double the whirlwind he would soon reap. Certainly, the Filipino people will not sit by idly as Duterte trades the country to his old and new foreign masters.