Caution urged over infra talks with China amid West Philippine Sea issue

Caution urged over infra talks with China amid West Philippine Sea issue
This March 22, 2021 aerial photo shows Chinese vessels still present in the Julian Felipe Reef in the West Philippine Sea, well within the Philippine exclusive economic zone and continental shelf.
Armed Forces of the Philippines

MANILA, Philippines (Updated August 17, 10:49 a.m.) — More economic and infrastructure project deals with China may "further compromise" the Philippines' position in the West Philippine Sea, a fisherfolk group said Tuesday.

An infrastructure think tank meanwhile said that government must make sure China loans are competitive if talks on funding for infrastructure should continue. 

"We demand that any negotiations with China be suspended until the latter leave the West Philippine Sea and respect the rights of Filipino fishers and vessels in our territorial waters," PAMALAKAYA National Chairperson Fernando Hicap said in a statement on Tuesday.

Transport Secretary Jaime Bautista met with Chinese Ambassador Huang Xilian last week where they "agreed to restart negotiations for major transport projects" as well as possible maritime cooperation projects between the two countries.

This included major railway projects previously reported terminated, such as the Philippine National Railway South Long Haul Project or the PNR Bicol, the Subic-Clark Railway Project, and the Mindanao Railway. 

These were left in the back burner as China was reportedly charging the Philippines a 3% interest rate, which is higher than the 0.1% Japan was offering. 

"It should be competitive to current interest rates for development loans being offered by other development agencies and bilateral partners," Infrawatch PH convernor Terry Ridon told Philstar.com in a text message.

"However, government should be wary on the current level of interest rates, as central banks have been raising rates in the past few months to curb inflation. Government therefore should reconsider whether or not to proceed with these projects until such time that interest rates and inflation have stabilized."

Possible bargaining chip

The Department of Transportation noted that the Chinese government’s funding support for the projects “will serve to strengthen bilateral relations and enhance the partnership between the Philippines and China.”

However, Ridon said the government should also consider tapping other multilateral partners for other projects in order to get competitive rates. 

PAMALAKAYA, on the other hand, warned that the transactions may be used by China against the Philippines when it comes to the WPS. 

"Not only these deals with China are costly and lopsided, but it could be used by Beijing as a bargaining chip to continuously occupy and militarize the West Philippine Sea with impunity," Hicap said. 

Manila has territorial claim over the West Philippine Sea, backed by a 2016 Hague ruling, but China still recognizes parts of the disputed waters as its own. 

President Ferdinand “Bongbong” Marcos Jr. said in his State of the Nation Address that his administration's foreign policy is to “not preside over any process that will abandon even a square inch of territory of the Republic of the Philippines to any foreign power.” 

On the West Philippine Sea, Marcos Jr. previously said that he hopes to expand the scope of the two countries’ bilateral relations beyond the West Philippine Sea to include other sectors such as culture, education, and military. 

Too early to say

Meanwhile, University of the Philippines’ Institute for Maritime Affairs and Law of the Sea Director Jay Batongbacal said that it might be too early to comment on the deals since talks are still ongoing.

“While the concerns expressed by others are valid, they are still speculative at this time,” Batongbacal told Philstar.com in a text message late Tuesday.

He also noted from the previous administration that China “is not as open or reliable as a source of development assistance.”

China has been touted as one of the Duterte administration’s partners in its Build, Build, Build infrastructure projects.

So far, Beijing has helped the country complete 17 infrastructure projects, while 20 remain in the pipeline.

“The current economic situation in China also appears to be hindering its ability to deliver on its existing Belt and Road Initiative projects in other countries,” Batongbacal said.

“It may not be as capable as before to commit to new big-ticket projects to countries like the Philippines.”

China’s economic recovery was stalled by its long quarantine period due to its zero-COVID policy, which then affected business activity and limited consumption.



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