Duterte brings home $24B from China

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‘PH-China to benefit mutually from closer ties’

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The Philippines’ move to mend and strengthen ties with China—which yielded $24 billion worth of loans and investment pledges after President Rodrigo Duterte’s trip this week—will create more opportunities for both countries, Fitch-owned BMI Research said.
tableDuterte wrapped up a four-day state visit to China on Friday, during which he announced his administration’s intention to separate from the US and forge closer ties with Beijing.

But his economic managers said the Philippines will keep its good relations with Western countries, and will forge stronger alliances with Asean, as well as with Japan and South Korea.

“In the short-term, we expect that that this could be beneficial for the Philippines economy, which will stand to gain from an increase in Chinese tourism, similar to trends seen in Malaysia and Thailand, more infrastructure investment, as well as an increase in bilateral trade,” BMI said in a report released Friday.

The President’s visit yielded $15 billion in investments including deals forged between local and Chinese companies, Trade Secretary Ramon Lopez said. The Philippines will also get $9 billion worth loans including $3 billion credits from mainland private lenders.

The two countries also signed seven joint agreements including a memorandum of understanding on tourism that is expected to help boost Chinese arrivals in the country.

Beijing has likewise lifted its travel ban to the Philippines, a move the tourism department said will encourage more Chinese tourists to visit the country.

The travel ban was imposed in 2012 after a naval standoff at the Scarborough Shoal.

Chinese tourists are the third biggest visitors in the Philippines, next to those from South Korea and the US. Last year, tourists from China rose 24.25 percent to 394,951.

Reversal in foreign policy

The relationship between the Philippines and China soured due to rival claims over the resources-rich West Philippine Sea, which prompted Duterte’s predecessor, President Aquino, to file an arbitration case in January 2013. The Permanent Court of Arbitration in The Hague ruled in favor of the Philippines in July this year, a month after Aquino left Malacañang after Duterte’s win in the May elections.

Malacañang said Duterte’s visit to China was intended to “repair strained ties” between the two countries resulting from the territorial dispute.

Duterte’s China pivot “marks a dramatic reversal in the Philippine’ foreign policy stance from one that is US-centric,” BMI said.

“This marks a complete reversal of the Philippines’ diplomatic stance under Duterte’s predecessor,” it said, “and we highlight that this will have important ramifications for the US’s geopolitical strategy in Asia, as well as economic, investment, and trade opportunities between China and the Philippines.”

As a result, the US will likely have to increasingly cultivate Vietnam as a regional security partner to partially offset the withdrawal of the Philippines from an informal US-led bloc of Asian nations aimed at counter-balancing China’s rise, it said.

But while forging better ties with China could provide a short-term boost to the local economy, the longer-term benefits would largely depend on the progress of government reforms to improve the business environment and efforts to reassure investors with a lower risk tolerance, BMI said.

Stronger Asean alliance

The Philippines also aims to pursue stronger alliance with its neighbors in Asean, while maintaining good relations with Western economies, the country’s economic planning and finance chiefs said in a joint statement.
“We will maintain relations with the West but we desire stronger integration with our neighbors. We share the culture and a better understanding with our region,” said Finance Secretary Carlos Dominguez and Socio-economic Planning Secretary Ernesto Pernia, who both accompanied the President to China on October 18-21.
Duterte has also directed his cabinet to move “strongly and swiftly” to strengthen alliances not only with Asean and China, but also with Japan and South Korea, which will give the country access to a lucrative 1.8 billion market across the region, the statement said.

After China, Duterte is set to visit Japan in the last week of October.

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14 Comments

  1. simply going red or not? if red stay mute then praise and kneel before the f@#cking dict king if not speak up people….your choice our choice people’s choice. . .

  2. I applaud the President on this wonderful victory that he had secured for the country. This will help the country to propel to progressive country and will help lift up the lives of the majority poor people and also more income for the businessmen. We are in the right direction and we must support our President.

  3. Loans that must be repaid. What is the collateral? The US and world bank along with EU sources and Japan were always available to loans that would pencil especially on projects that would have long term benefits. Interesting how within only days of taking office long term and firm relationships were broken/strained almost as it were planned.

    US offshored manufacturing jobs to china to open new markets and take advantage of low cost labor. Those jobs will now be replaced over time by robots and Latin American labor. Service job have been flowing into the Philippines, those are much longer term and much more difficult to replace. But replaceable they are..

    Military bases that cost Millions and Millions of Dollars to build using local labor and then provide millions of dollars to the local economy for generations to come are now scrapped.

    Today it is the US, Next it will be the Catholic church or maybe even the national government and very freedom of democracy itself.

    May God Bless the Philippines and the Filipino People.

  4. jose b. taganahan on

    The $24 billion ($15 billion in investments including deals forged between local and Chinese companies, Trade Secretary Ramon Lopez said. The Philippines will also get $9 billion worth loans including $3 billion credits from mainland private lenders.) is a very cheap price to pay if it means our surrender to China of our claims over the resources-rich West Philippine Sea, which prompted Duterte’s predecessor, President Aquino, to file an arbitration case in January 2013.

    Incidentally, the Permanent Court of Arbitration in The Hague ruled in favor of the Philippines in July this year,

  5. History has REPEATEDLY shown : ONCE in every few HUNDRED years, nation and civilization will emerge a great VISIONARY leader that bring sharp TRANSFORMATION and UPLIFTING of its people , from general poverty, ignorance . inequality,injustice,civil wars,colonialist CORRUPTION degradation to EMERGENCE of its citizen to wealth , prosperity, DIGNITY, CONFIDENCE and SELF DETERMINATION and its nation state tp one that is truly with great economic social and political strength that is well respected by its neighbors and the world.
    Current running SUCCESSFUL examples : Singapore (Lee KuanYew) China(Deng SiowPeng n Xi JinPing)
    PAST examples : innumerous, starting from a study of history and bible from Moses onwards and all the rise of great civilizations………..
    I am a keen observer of human condition and experience and ASEAN neighbour, my family married into a Ph family from a less developed island. I have but the best wishes for Phillipinos especially the poors. I am reminded of the less-privilleged living in deplorable conditions of slums and squatters in major cities like Manila ,Quezon…… similar to those I witnessed in slums and ghettos of New York, Chicago and Detroit and other inner-city slums. Conditions worsen and accelerated by the globalization policies blindly championed and bulldozed by the American establishments. I am talking about the 1% vs 99% income,wealth and poverty gap so stubbornly refused to go away under successive elected politicians of the American-supervised democracy , because they lacked the courage and tenacity to bring genuine goods for the poors and the future generations.
    Today, Philippine is suddenly at a crossroad and presented with an historic opportunity , totally unexpected and unimaginable just 6 months ago : This 24b and the futures your president’s ice-breaking journey portend should not be taken for granted. For it may be cut-short or scuttled by the external and/or internal forces (that 1% represented by pro-establishment interests that might be threatened when Philippine’s transformation occurs.) Think of the fate of great American leaderships like Abraham Lincoln, MLK, Kennedys that leadership Americans could have, Think of Rizal ,Bonifacio and Aquino Snr leadership that Philippines could have
    To be contd…
    “Be the change that you wish to see in the world.”
    ― Mahatma Gandhi

  6. Duterte is merely modest example of what the American people (and the rest of the world, for that matter) can look forward to, if Donald Trump is elected.

    Although, credit where credit is due. Duterte can pronounce “Hombre.”

    • Lol! That’s it? Man you’re required to do a minimum of 1000 words if for you to be a paid troll! I’m sure yiu can do better Bob! Try again!

  7. WOW!!!
    From just US$3 Billion originally expected before Pareng Digong’s departure for Beijing, the “goodies” he has brought home (from China alone) to the Filipino people have ballooned to a mind-boggling US$24 BILLIONS or PHP1.16 Trillions, ONE-THIRD of our annual budget!!
    Even I am impressed. In 2015, our budget deficit amounted to PHP121.7 Billion. In other words, China’s “package” covers 9-1/2 years of deficits! With no more budget deficits, watch the Philippine Peso shoot up through the roof.

  8. vic penetrante on

    Th Presidnts’ pride: All the presidents who went abroad said they have brought money for the country! COA has no way of making a balance sheet.

  9. good move. the US didn’t do anything when china took over the island. the US didn’t do anything when the hague ruling favoured the Philippines. hence, a move to be-friend everyone and be independent can be seen as the right move.

    • Independent foreign policy and breaking relations with US, this is a poison , that Du30 administration want us to swallow. It is not going to work.