China 'convinced' Duterte's telecom role offer can help boost ties

MANILA, Philippines — President Rodrigo Duterte’s invitation to China to be his country’s third telecoms operator is seen to further sweeten the two nations’ ties “in various areas” in the future, the Chinese government said Monday.

Duterte made the offer to China last week to visiting Chinese Premier Le Keqiang in a bid to break a longstanding duopoly that has angered consumers in a country said to have the slowest internet speed in the Asia Pacific.

No particular Chinese company had been lined up to take on the project.

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In his remarks which signal Beijing’s willingness to run a telecom carrier here, Chinese Foreign Ministry Spokesperson Lu Kang said although he was not privy to the details of the cooperation, such a partnership could further boost Manila and Beijing’s relations.

“During Premier Li Keqiang's recent visit to the Philippines, the two sides reached a series of important consensus and outcomes in such fields as infrastructure, economic and trade investment, production capacity cooperation and intellectual property,” Lu told a press conference.

“We are convinced that this will further promote our cooperation in various areas in the future,” he added.

“The Philippines is China's friendly neighbor and important partner, and the Chinese side always attaches great importance to its relations with the Philippines.”

Duterte earlier threatened incumbent providers PLDT Inc. and Globe Telecom Inc. with new competition from China if they do not shape up.

Cloud service provider and content delivery network Akamai Intelligent Platform recently reported that the Philippines has the slowest and most intermittent internet connection speed in the Asia Pacific at 4.5 megabits per second.

Last year, PLDT and Globe together agreed to buy conglomerate San Miguel Corp. out of the sector for $1.5 billion, pledging to invest heavily to boost internet service. The acquisition was the country's biggest corporate transaction in nearly three years.

The Court of Appeals, in a decision dated October 18, ordered the Philippine Competition Commission to permanently stop its review of the deal and recognize its validity.

In 2007, the Philippines signed a contract with China's ZTE for a national broadband network. However, the project was marred by alleged overpricing and kickbacks and was eventually terminated.

Meanwhile, moves to open up the Philippines’ telecom industry might face some challenges. Under the Constitution, foreign investors are only allowed up to 40 percent on certain businesses and industries.

The Duterte administration has been working on easing foreign ownership limits by relaxing the Foreign Investment Negative List (FINL), particularly in the areas of retail trade, practice of professions, public utilities and infrastructure contractors.

Restrictions on foreign ownership, however, cannot be all lifted administratively as several prohibitions need legislative action.

READ: NEDA pushes maximum easing of foreign ownership limits