The governments of the Philippines and China exchanged letters related to the first two feasibility studies of the nine projects getting support from the Chinese. The feasibility studies pertain to the construction of the Panay-Guimaras-Negros Bridges Project and Davao City Expressway Project. Signatories are Finance Secretary Carlos Dominguez and Vice Minister Fu Ziying of the Ministry of Commerce. (DOF/March 17, 2017)

Resurgent Editor-in-Chief Nikki Rivera Gomez recalls the first months of the Duterte administration's engagements with China, and offers a glimpse of what the future may bring.

In April 2016, a month before he would win the presidential elections, Rodrigo Duterte issued a statement clarifying his stand on China.

In his sorties, the mercurial mayor from Davao had cautioned Beijing about even mentioning “ownership” of the disputed Spratly Islands, adding that if the Chinese agreed not to invoke “sovereignty” at any time during his presidency—that is, if he won—he would “shut up” as well.

But on April 12, his camp said that “(he) believe(d) the Philippines should continue to work closely with other countries towards finding a solution to the issue. However, if this multilateral approach proves to be inadequate to resolve the issue, he is willing to explore other options including directly talking with China.”

The communique made it clear that Duterte fully supported the Philippine position vis-a-vis China pending at The Hague and that he was “hopeful for a favorable ruling.” (The ruling, as it turned out in July of that year, did favor the country.)

The statement also pointed out that it was Duterte’s belief that “any military conflict involving the Philippines over the West Philippine Sea should not happen as it will derail Philippine economic growth.”

That singular message was a dramatic break from his usual utterances and betrayed a fresh broadmindedness over geopolitics. 

Duterte won by a landslide in May, demonstrating among other things the massive electorate’s concurrence with his practical approach to many issues, not the least among which was China.

Yet the proof of the proverbial pudding didn’t rest solely on the more than 16 million people who voted for him. It rested also, it would now seem, on the Chinese themselves who by then must have begun thinking twice about the small-town mayor who could help them save face on the heels of the embarassing Hague ruling.

Felt Changes

Barely five months after the last ballot was counted, 80 Chinese businessmen chartered a Xiamen Airlines plane to Davao City, Duterte’s hometown, to signal the start of exploratory direct flights. The choice of Davao over the traditional hub of Manila was deliberate, apparently in recognition of the southern city’s key role as a gateway to China and the Asean. 

Shortly after, on October 7, newspapers became awash with reports that China had lifted its ban on Philippine banana exports. 

Earlier, some 35 tons of Philippine bananas worth $33,000 were destroyed by China over purported sanitary issues. It also suspended 27 exporters in the process.

With the lifting of the ban, the industry conceivably heaved a collective sigh of relief, considering that before the suspension, it had been exporting $157.5 million worth of bananas to China. Some 66,000 Filipino famiies depend on the industry.

For good measure, Chinese Ambassador Zhao Jianhua said his country was now also keen on welcoming other Filipino fisheries products, e.g. crabs, lapu-Lapu, shrimps, prawns, and tuna.

Meanwhile, potential Chinese investors began streaming into Davao City in various batches, exploring markets and products. 

By October and towards the end of the year, Duterte had stepped onto Chinese soil as President of the Republic, secured a record $15-billion in investment pledges, and inaugurated a sprawling drug treatment and rehabilitation facility, funded by a Chinese tycoon, in Nueva Ecija. 

The facility is nothing to sneeze at, not even by the standards of Duterte’s rabid anti-drug war critics: The floor area alone of some 172 building units, to accommodate 10,000 patients, occupies 60,000 sq. m. The complex sits on an 11-hectare property, the size of a modest subdivision.

To keep the momentum of his state visit going, Duterte’s economic team flew to China in January to hammer out the details of the mega pledges. The Chinese have returned the favor: Quoted by media when he visited the country, China Commerce Minister Gao Hucheng said his people “would like to continue to enhance the mutual trust and the mutual understanding with our Filipino colleagues in order to further expand and deepen our practical cooperation.”

Not content with the diplomatese, Beijing dispatched its highest politburo official, 3rd Vice Premier Wang Yang, to Davao, to affirm the Philippines’ strategic role in an upcoming agreement called the Regional Comprehensive Economic Partnership. He also formalized $6 billion in bilateral agreements in the areas of agricultural exports and infrastructure.

In between all of the money talk, another drug rehabilitation center was inaugurated in Sitio Maag, Penaplata, Island Garden City of Samal. It was built by the Federation of Filipino-Chinese Chamber of Commerce and Industry, Inc., which promised to put up 15 more facilities in support of the President’s anti-drug campaign.

In Mindanao alone, four 250-350-bed facilities are scheduled to be erected, three of which will be financed by the Chinese public and private sectors. Healthsecretary Paulyn Jean Ubial said these will be located in Davao City, Bukidnon, Sarangani and Agusan del Sur.

Cooperation vs. Dispute

For quite some time, scholars and diplomats have believed in the long-term wisdom of maintaining good ties with China.

As early as the Ramos administration, trade and commerce took precedence over sovereignty issues, the better to obtain mutual benefits rather than engender mistrust and animosity. For the pragmatic Ramos, it was a no-brainer.

His presidential assistant, Paul Dominguez, had in fact led a Mindanao trade and investment mission to Guangdong Province in 1994 at a time when no one else paid serious attention to it. Guangdong, which is the size of the Philippines, and southeastern China for that matter, are a stone’s throw away from the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area, the subregional scheme of mutual cooperation grandfathered under Ramos’s watch.

Even in 2007, more than a decade after the Guangdong visit, Duterte, as Davao mayor, signed a sisterhood agreement with Nanning, a Chinese city in Guanxi province. The latter’s mayor had previously visited Davao, and Duterte reciprocated with his own overtures in cultural and economic understanding. Even then, he’d been outspoken against Washington.

Today more than ever, China scans the panorama of her Asean neigbors as she plots out the possibilities of recreating her ancient, immensely profitable Silk Road. 

Will the Philippines, now as chair of the Asean, lead in strengthening this new regional order where neighboring economies help each other in building bridges, physical or otherwise? As Lucio Blanco Pitlo III, of the asian and pacific affairs desk at Padre Faura, wrote in 2015, “principled disagreement on political issues do not constitute a hurdle to pursuing practical cooperation in infrastructure development.”

Perhaps Duterte’s maverick cards may yet win us more than just the cash.