Xi and Duterte: Building progress and hope

By Ghie Datoy

“Nowhere is this progress seen more clearly in the fruits of Duterte’s “independent foreign policy.”

Our country continues to be wracked by artificially created internal strife as the mainstream media headlines and broadcasts tend to show. But the reality is quite different.

As the recent surveys show, President Rodrigo R. Duterte’s ratings remain “very good,” indicating great support for the Chief Executive as his promising socioeconomic projects proceed at full blast on the third year of his administration.

Nowhere is this progress seen more clearly in the fruits of Duterte’s “independent foreign policy.” While there were a few who remain critical of Duterte’s engagement with China — mostly from “think tanks” and media circles funded by US institutions and foundations, claiming for example that China’s funds have not been delivered and constitutes a “debt trap” — all these have been debunked as we will discuss below.

Fantastic pace of progress has been made since President Duterte and President Xi Jinping shook hands in October 2016. From this handshake has emerged $25-billion in assistance or grants, loans and investments, plus trade and tourism that we see every month growing by leaps and bounds.


Record tourist arrivals

DoT spokesman and undersecretary for Tourism Development Planning Benito C. Bengzon Jr. reported last June that Chinese tourist arrivals to the Philippines recorded a 52.65 percent growth. Chinese tourists are also the top spenders. In a report last January, Chinese tourist receipts for one month alone hit P9.95 billion, the Korean came second with receipts of P9 billion while the US placed third with P2.48 billion. China’s tourism arrival is expected to hit 1.5 million in 2018 from 675,663 in 2016.


Banana exports leapfrog

A little-known fact was the tremendous leap of Philippine banana exports to China. Since Taiwan’s Tsai Ing-wen took an antagonistic posture vis-à-vis the People’s Republic of China, the Philippines has been the beneficiary of China’s shift away from Taiwan for banana imports. It helped the product’s export surge by 61.2 percent to $70.52 million as of January 2018.


Real estate boom

As the Nikkei Asian Review reported last March, at least two major Filipino developers saw their 2017 sales of condos surge. Chinese buyers constituted 49.4 percent of Ayala Land’s international sales, accounting for 34 percent of its total 122 billion pesos sales or around P40 billion. American and Singaporean buyers had a combined share of 21 percent. SM Prime Holding doubled its sales to Chinese buyers from 5 percent to 10 percent of its total international sales.

We hear some concerns about Chinese buying spree, pushing up real estate prices. But as the research of the think-tank Integrated Development Studies reveals, the multiplier effect it generated in other industries like the restaurants, shops and services redounded to direct benefits for Filipinos. The huge profits these developers generated should also provide a new source of investment for medium and low-cost housing that will spread development outside the metropolis. These condo sales do not include office spaces Chinese BPO’s are renting by the tens of hectares. Add to that the taxi drivers’ incomes from young Chinese passengers living and working around these office centers ballooned by 50 percent.


“If you want to be rich, build a road.”


These are only private sector economic surges, some directed by the Chinese government while others by the sheer momentum of economic expansion. The government’s “Build, Build, Build” projects are too numerous to detail in an article but they can generally be summed up as infrastructure development in nature. Just to name a few, two donated bridges worth P6 billion and meant to ease traffic in Makati and Binondo have broken ground (while five more bridges across the Pasig will also be funded by China). Likewise, the P4.37-billion Chico river irrigation pump that will irrigate thousands of hectares of farm lands, is among many other projects nationwide supporting the President’s push to spread development to the countryside.

But the centerpiece for this year’s PH-China activities includes the signing of the agreement for the $3.5-billion Manila to Matnog, 600-kilometer South Rail project during the November visit of President Xi Jinping to the Philippines. And this is only part of the First Basket. A second basket of big-ticket projects includes the Mindanao and Metro Manila flood control projects, bridges connecting Visayas, rehab of hydro power systems and more railways.

So, where did all the talk about “Duterte’s elusive Chinese investment bonanza” come from, as the Yellow-backed “intellectual” Richard Heydarian wrote last April in the Nikkei Asian Review? The Duterte-Xi commitment to boost the Philippine economy and the 1,000 years of friendship of the two nations is literally being built with concrete and steel. The massive anti-China and anti-Duterte campaign has, fortunately, been debunked by facts on the ground.

Prof. Alvin Camba, a Filipino doctoral candidate at the Johns Hopkins University in Maryland, USA, shed some light on these investment issues during the forum entitled “PH-China cooperation in the midst of the US-CH Trade war” held last 6 September at the Ateneo. Also, two articles of Camba — “Varieties of Capital: The Direction and Implications of Chinese FDI in the Philippines” and “Claims about China’s ‘missing’ $24 billion border on yellow journalism” — were thought provoking. Let me quote from the summary of his presentation.

“Investment cancelation and delays occur mostly due to factors in the host state. The media reportage of stalled Chinese projects ignore that FDI and aid memorandum of understandings (MoU) are often likely to be canceled, modified or delayed after the initial signing process — and this is not unique to China. The Duterte administration signed a $6 billion MoU for FDI from Japan, a $1.2 billion MoU with India, and a $650 million MoU with Saudi Arabia and Qatar.

Data from the Bangko Sentral ng Pilipinas show a huge discrepancy between the committed and actual amount. Signed in January 2018, the MoU with India has resulted in just $600,000 so far. The MoU with Saudi Arabia and Qatar, which pledged $465 and $175 million in April 2017, have resulted in just $3.5 million in total. And Japan’s October 2017 commitment has translated into only $48.3 million.”


“Fantastic pace of progress has been made since Presidents Duterte and Xi shook hands in October 2016.”


As the old Chinese saying we learned from one of Ambassador Zhao Jianhua’s speech, “If you want to be rich, build a road.” China is helping the Philippines build the roads, railways, irrigation and flood control systems and drug rehab centers. And let us not forget, the new funding of P226.92 million for the hybrid rice research center in Central Luzon State University the Philippine government built with China’s help twenty years ago. So, Duterte’s initiative for progress and hope is here to stay!

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