Continuity

President Rodrigo Duterte capped today the end of his three-nation journey in China where he joined the “Belt and Road” Forum for International Cooperation being held in its capital city, Beijing. The formal presentation of the “One Belt, One Road” (OBOR) initiative of Beijing highlighted the international forum which ends today.

Aside from President Duterte, the OBOR event was attended by 27 other heads of states and government and respective heads of United Nations, the World Bank; and, the International Monetary Fund (IMF). No less than President Xi Jinping of China will preside the leaders’ roundtable scheduled for today.

President Duterte and Chinese President Xi had a bilateral meeting yesterday. This will be the second time the two Presidents conducted four-eyes meeting in Beijing. President Duterte first met with President Xi during his state visit to Beijing in October last year.

Philippine ambassador to China Jose Santiago Sta. Romana was quoted as saying President Duterte has “the ability to have the ear of the Chinese President.” In fact, President Duterte himself announced having called up President Xi from Davao City a couple of weeks ago to relay the message of US President Donald Trump over nuclear missile threats by Beijing-backed North Korean leader Kim Jong-un.

The Philippine ambassador hastily doused cold waters to persistent talks about President Duterte’s setting aside the hard-fought The Hague Arbitral ruling just to get the good graces of China. “What we have won legally, we will not abandon,” Sta.Romana reiterated.

To the annoyance of Beijing, former President Benigno Aquino III pursued before the international arbitration body our country’s overlapping maritime claims on the disputed islands, reefs, atolls, and rocks in the South China Sea. Beijing has been insisting to resolve the South China Sea dispute bilaterally among claimant countries like the Philippines.

Having resided in Beijing for some decades as a journalist, Sta.Romana has seen and observed for himself how the festering South China Sea dispute has not been handled properly in the past years. Thus, it has strained Manila-Beijing relations in recent years until a new administration took over the Philippine government.

Sta. Romana credited President Duterte's strategy has obviously cured this strain since he assumed office at Malacanang Palace. He described it as “two-track” strategy as conducting economic, trade, cultural, and people-to-people contacts being pursued vigorously without being sidetracked by the South China Sea dispute.

“Putting the South China Sea issue on a separate track does not mean we will abandon it. The South China Sea dispute should not be put at the center of the discussion; it must be on a separate track,” he pointed out.

With no less than President Duterte attending “The Belt and Road Forum,” Sta.Romana believed it would be a great opportunity for him to present and explore our own country’s initiatives to promote economic development projects before the international gathering of potential funding sources.

According to the organizers of this Forum, the “belt” refers to China’s ancient trade routes dubbed as Silk Road that crossed Europe-Asia. The “road,” on the other hand, stood for the “maritime silk road” of sea routes along which Southeast Asia, South Asia, Arabia, and Africa traded with ancient China.

Launched in 2013, it is an ambitious project of China to interconnect Asia, Europe, the Middle East, and Africa through comprehensive trade and infrastructure projects. The project aims at both regional and inter-regional integration encompassing potentially up to 65 countries, including the Philippines.

Since OBOR’s launching, China reported having invested more than $50 billion in “Belt and Road” countries. Of this total amount, $40 billion was dedicated to a Silk Road Fund. Subsequently, China set up its own Asian Infrastructure Investment Bank (AIIB) in 2015 to provide financing for infrastructure projects in Asia.

But it was only in December last year that the Philippines became a member of the AIIB following the ratification by the Senate of the country’s participation to this newest multilateral financial institution. The Philippines paid the initial tranche of paid-in capital worth $40 million, or about P2 billion sourced out the government’s budgetary savings last year for membership to the AIIB.

As member, the Philippines was required to contribute to the AIIB a total of $200 million, or about P9.3 billion in paid-in capital, payable in five tranches until 2019. The AIIB’s total capitalization was $100 billion. The second and third installment payments to the AIIB, worth P3.72 billion, were already provided for in this year’s Congress-approved national budget.

Thus, the Philippines will have a total voting power of 12,821 votes, or 1.1 percent of the total voting power across all members, as well as join the proposed constituency comprised of Bangladesh, Malaysia, Maldives, Nepal and Thailand.

Finance Secretary Carlos Dominguez III reportedly “strongly backed” the participation of the Philippines to the AIIB in addition to the country’s existing membership to the Asian Development Bank, the World Bank, the IMF, among other multilateral financial institutions. Sec.Dominguez cited the need of another source of long-term funding at very reasonable interest rates for the massive infrastructure projects lined up by the Duterte administration.

Dominguez is among his economic managers who drew up the so-called "Dutertenomics" that laid out the big-ticket infrastructure projects with a promise of more jobs and more income for Filipinos. They recently unveiled “Build, Build, Build” plans to build P8.4 trillion in new roads, railways and bridges. 

The timelines of many of these projects would go beyond the term of President Duterte ending on June 30, 2022 yet.

Eleven months into his six-year term, President Duterte has yet to ground break any of these major infrastructure projects of his administration. Actually, many of these projects were inherited from the past presidents before him who had their own plans and agenda to pursue.

We have seen this recently after the Aquinomics thrashed the Arroyonomics. The problem that bedevils this country every time a new administration takes over the helm of government is lack of continuity.