Part Two: Building National Security on Realpolitik not Megaphonics
Defense Secretary Gilbert Teodoro does not have to zero-base his jumpstart into his new office.
His model and close-in adviser should be his predecessor Delfin Lorenzana who has showcased a most outstanding achievement, eviable to be equaled, on how a former major-general, turned a level-headed civilian, ran an establishment of mostly military personnel for six years.
It is obvious Gibo does not have chevrons Lorenzana has earned since he graduated from the Philippine Military Academy. The former defense chief is also the last person I came to know who will do a kneejerk because he has always been a seriously-informed person.
He uses real-time intelligence to verify media reports and information passed on to him by his subordinates before making impressions. Moreover, he tones his out-of-the-box thinking onto commonsensical approaches in problem solving. Moreover, his decisions are not colored by ideology, personal preference and old-guard nuances common to โmistahsโ.
He served as one of President Rodrigo Duterteโs confidant and top adviser not just on defense and national security matters but even foreign relations, armed insurgencies and the drug war, Covid pandemic and disaster management.
If we did not hear a single complaint during Duterteโs watch about how his administration handled man-made (such as the Siege of Marawi) and all natural disasters, Lorenzana was proactively on top of it.
That should be important to Teodoro because his greatest failure as defense secretary to Gloria Arroyo, was how he handled or mishandled the Ondoy (Typhoon Ketsana) aftermath in 2009, one year before his term ended.
The man delivers
Only a few also know that Lorenzana served in Washington DC, three years as defense and armed forces attachรฉ, and twelve years as veteransโ affairs officer โ more than enough to really master the American system and mentality.
In defense, he negotiated for foreign military sales (FMS) of $100 million and the grant-in-aid of 20 Huey helicopters and 1 Cyclone Special Operations ship. For our World War II veterans, he raised almost $300 million dollars in benefits and about $12 million for updating of facilities Veterans Memorial Hospital.
Significantly, he also inherited the lobby began in 1987 by Ambassador Nicanor Jimenez and I for the return of the historic Balangiga Bells from the United States. He finally succeeded bringing them home to Eastern Samar in December 2018 as peace offering of Barack Obama to President Duterte.
President Marcos Jr.โs instruction to Teodoro to look for nontraditional partners in in security and defense issues, is already a legacy that Lorenzana has established.
Instead of once officer-in-charge Carlito Galvezโ sole tack of fleecing the Americans for a measly $100 million for so-called EDCA bases, his predecessor sourced armaments from China (armaments and cranes, army engineering equipment), Russia (assault rifles and heavy-lift helicopters), Israel (fast attack interdiction craft-missiles), India (Brahmos supersonic missiles), South Korea (new frigate and patrol ships), Poland (Sikorsky helicopters) and Sweden (multi-role jetfighters).
Harmony with China
In 2015, I travelled to China with Serafin Ledesma Jr., a columnist for the Sun-Star Daily in Davao and gave him three copies of a monograph of my book โA Problem for Every Solutionโ. When I asked him a few weeks later to whom he gave them, he said, โI gave one to your contemporary Antonio Ajero, de facto dean of journalists in Mindanao and publisher of the Davao Edge. The third copy, I gave to Digong, who like you studied in San Beda.โ
I can only surmise he read it. Here are some talking points.
Derived from Lao Tzuโs teaching from the Book of Changes, โkang long you huiโ โ freely translated as even a proud dragon will have to repent when it falls after flying too high into the thin, freezing air. Applied to foreign policy, this means that large countries should not be consumed by their quest for power.
The second teaching is found in Lao Tzu’s Tao Te Ching, “mu lin, fu lin, shan lin” – fostering an amicable, secure and prosperous neighborhood – since the large stream does not strive to be dominant, the smaller streams and large rivers and seas work together.
China does not practice hegemony but promotes “win-win” solutions, characteristic of equality, mutual benefit, mutual aid and cooperation.
This is how China earns the trust of its neighbors. It works to attain harmony embodied in the term “hexie”, the totality of its foreign relations. This is not to be misunderstood however as weakness, because to protect its own sovereignty, it adopts active defense as principle – “ren bu fan wow o bu fan ren, ren rou fan wow o bi fan ren” – meaning we will not attack unless we are attacked, we will certainly counterattack if we are attacked.
I also explained in that book, how China is expanding a Belt and Road Initiative to connect to developing economies, especially small states, notably in Africa.
From there, Duterteโs instincts took China President Xi Jingpin to a handshake.
Teodoroโs myopia
It was therefore awkward for Teodoro to lecture China about magnanimity to small nations because the cornerstone of its foreign policy is a lot more than that. In fact, Team Duterte-Lorenzana flexed and maxed the China card to serve our peopleโs interests.
The first litmus test of Chinaโs magnanimity is its role in the preservation of the Philippine sovereignty, the survival of the state.
The terroristic attack by Islamic State-linked Maute group and its allies on the island of Mindanao on May 23, 2017 was the biggest warning yet that a Daesh, acronym for Arabic al-Dawlah al-Islฤmiyyah, was building a base in Southeast Asia at Marawi City.
When the United States refused to deliver arms to our military that our government had already paid for, leveraging Duterte on propped-up human rights accusations, China immediately donated 3,000 rifles and 6 million pieces of ammunition worth P370 million. Three kinds of rifles were provided: sniper rifle, automatic rifle, and high-precision rifle.
Nearly 300 people have died in fighting between Philippine forces when on October 23, 2017, Lorenzana announced that the five-month battle against the terrorists in Marawi had finally ended. There is no way to speculate how badly the turnout could have ended without the quick response of China to an erstwhile friend at a time of dire need.
The second test was saving millions of Filipino lives. There is a local adage โ what good is the grass, if the horse is already dead.
The Department of Health (DOH) on February 2 recorded the first COVID-19 fatality in the country. When the Philippine government declared quarantine measures on March 12, 2020 to deal with the coronavirus pandemic, China immediately offered its assistance and unwaveringly expressed its willingness to cooperate with the Philippines.
Upon request of the Philippine government, Beijing quickly responded by sending to Manila 12 members of its Anti-Epidemic Medical Expert Team on April 5 in order to support the Philippines in its battle against Covid-19.
After the medical team left on April 19 after two weeks of assisting Filipino health officials and experts in the Department of Health (DoH), Research Institute for Tropical Medicine (RITM), Lung Center and Philippine General Hospital and also the general public, preparing to manage the pandemic, China donated medical supplies to the Philippines in the form of 102,000 test kits, 400,000 surgical masks, 40,000 medical N95 masks, 15,000 medical protective suits, 5,000 medical face shields primarily for the health frontliners and 30 non-invasive ventilators for the initial patients.
While the Chinese national and local governments also assisted the Philippines in purchasing around 10,000 cubic meters of anti-epidemic supplies and โlarge amount of medicine,โ Chinaโs private big corporations and peoples organizations also flowed in grants.
The Philippines also requested the assistance of China to prioritize the delivery of the Beijing Genomics Institute laboratory equipment worth $2.5 million (around P126.9 million), which arrived on April 22, to help fast-track the much-needed testing of Filipinos.
In stark contrast, when the United States could not deliver vaccines and medical supplies they promised to the Philippines by December 2020, Chinaโs donations of 600,000 doses of Sinovac on February 28, 2021, enabled the Department of Health to launch our vaccination campaign the next day March 1.
The American Pfizer and Moderna vaccines finally arrived in May after 5 months of delay. By August, 2021, China had already delivered 26 million doses of Sinovac and Sinopharm vaccines to Manila.
Jumpstarted by China, the Philippines had achieved 77.8% of its target vaccination rate by the end of June 2022, helping the economy to open up early. Notably, by the end of 2021, the countryโs economy grew by 5.6%, a rebound from a โ9.5% contraction in 2020.
This takes us to the third test which is our countryโs development.
From P234 million exports in 1995, the Chinese has now become our largest trade partner with $13-B exports in 2021. China accounted for 57% of Philippine exports of copper, 71% of ores, 65% of mineral fuels, 30% of fish and crustacean and 13% of electrical machineries.
China had been the top export market for Philippine bananas since 2018. PSA statistics reveal that banana exports to China surged from 748,500 tons in 2017 to 1.27 million tons in 2018, corresponding to a 70% increase. This rapid growth continued in 2019, with a 40% increase, now topping $600 million annually.
Philippines fresh or dried pineapples to China in 2021 was $122 million or 39% overtaking Japan by 1%. China also imports substantial volumes of mangos, avocado and recently durian helping productivity in the countryside.
Our fisherfolk also gained access to their fishing grounds, aided by a government- to-government bilateral mechanism despite exceptions bellyached Philippine Coast Guard wannabes and reckless politicians.
https://www.manilatimes.net/2023/06/15/news/national/more-local-fishermen-now-fishing-in-wps/1896165
Chinese tourists grew from 360,000 annually in 2015, the last full year of President Noynoy Aquino who was hostile to China, to a 500% increase in just four years at 1.8 million in 2019, contributing on that year alone $3 billion to our gross national product.
We now have over 300,000 overseas Filipino workers in China, remitting billions annually.
A $3.5 billion steel factory has also been built in the Philippines creating over 100,000 jobs, and another P5 billion invested in digital infrastructure to improve internet for Pinoys.
China also donated to help stabilize our agri-fisheries sector involving 10,000 tons of rice; 100,000 red grouper fingerlings to Palawan, and hundreds of millions worth of organic and urea fertilizers, as well as tens of millions for disaster relief, school buildings and health centers.
The fourth test is sustainability.
In hard infrastructure, the growth of Chinese loans and grants to the Philippines under the Duterte administration has been phenomenal.
For starters, $100 million in principal and penalties for the Philippine default in the North Rail project during the Arroyo administration, was forgiven.
In 2016, the first half-year of the Duterte administration, there was only one Chinese project worth only USD1.56 million.
In October of that year, Duterte visited China and entered into 13 cooperation agreements worth USD$24 billion in pledges, of which USD$15 billion were business-to-business contracts and USD$9 billion were official development assistance (ODA). By 2017, Chinaโs ODA increased to PHP10.857 billion.
As of 2019, the BBB program included 75 priority infrastructure projects, of which 16 projects worth PHP672.4 billion were to be funded from Chinese loans.
The fifth test is in actual investments, with Chinese characteristics.
Focusing on large-scale National Economic Development Authority (NEDA) infrastructure projects alone and asserting that Duterte did not gain anything from China are simply untrue and could miss understanding significant processes at work.
The Diplomat had advised analysts to instead look at Chinese capital that do not conform to the standards of official development assistance (ODA) including hidden debt created through Special Purpose Vehicles, Foreign Direct Investments or Flexible Capital, including those in underground sectors. NEDA understates these forms of Chinese investments, but which have had enormous development and social effects on Filipinos.
Special Purpose Vehicles (SPVs) are legal entities that are used to pool money from a group of investors to make a single investment in a startup, with help from Chinaโs state policy banks to maintain the host countryโs debt-to-GDP ratio. This is the case of the Dito Telecommunity foreign direct investment (FDI) which is worth at least $5.4 billion with dozens of new grids currently under construction across the country. Investing capital in a sector ripe for competition and strategic gains of telecommunications are already major wins for both China Telecom and the Chinese state.
The second thing to note regarding Chinese investment under Duterte is the extent to which FDI is a major vector for state funding. Between 2016 and 2022, Philippinesโ Central Bank data shows that firms from China, Hong Kong and Taiwan invested $2.3 billion in the Philippines. The Philippine Security Exchange Commission database, a far more robust dataset than the Central Bank, shows that Chinese citizens have invested ahead of all other nationalities by far.
From 2016 to 2018, there were 3,634 firms established with Chinese investors, which was far higher than the number of new firms with Japanese and US investors (1,091 and 1,317, respectively). Many of these were joint ventures, with Chinese investors either legitimately working with Filipino businesses or using Filipino โfrontsโ to represent them to the Philippine government, in the wholesale and retail sector, construction, transportation and services, including hotels and tourism, financial and lending services, and language and translation, among others.
The third thing to note is the global increase of what scholars have called โflexible capital.โ The rise of China as a global power has been accompanied by the simultaneous surge in the number of Chinese billionaires who have extricated their savings from China moving them into the Global South.
In the Philippines, flexible capital can be found most notably in online gambling. Approximately 129 online gambling firms began their operations by legally or illegally importing hundreds of thousands of Chinese-speaking workers. Online gambling firms have purchased a huge stock of condominium units in Metro Manila, leading to the increase in real estate prices beyond the range that most Filipinos can afford.
Alongside online gambling, on-site casinos with escort services have expanded in Metro Manila, booked through WeChat, the Chinese chat client, to cater to Chinese, East Asian, Filipino, and Western customers. Consequently, Manilaโs land prices rose an average of 6 percent in 2017, with the Manila Bay Area seeing the biggest increase at 27 percent.
Conclusion
The Philippines was actually not part of the original Belt and Road Initiative when it was launched because of former President Noynoy Aquinoโs toxic zero-sum foreign policy that was hostile to China.
Under President Duterte, we naturally blended in. Because of goodwill reestablished between our two countries, our maritime issues in the South China Seas issues have become a minimal part of our bilateral relations, and priorities significantly turned to the basic needs of our people and our requirements as emerging economy.
As for Teodoro, it does not require one to graduate from Harvard to be grasping at wisdom to give our people a better life โ choosing between sheer testosterone and saber-rattling on one hand, and bread and economic development.
It is really all up to the incumbent president, who is the chief architect of our foreign policy to make this stick. But as the new secretary of national defense, he can advise him to grow out of the United Statesโ cold-war mentality and share Chinaโs magnanimity.
But, trust me, it will be not to our national interest escorting the former, as its Pax Americana Empire descends from the pedestal. #
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