Mid-term project

The announced state visit to the Philippines of China’s President Xi Jinping will likely happen this November. In his message on the occasion of the 149th National Day of China last week, President Rodrigo Duterte stated he is looking forward to the forthcoming reciprocal visit of the Chinese leader in Manila.

Malacañang first disclosed President Xi is expected to visit the Philippines later this year after the Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit to be held in Papua New Guinea. Coincidentally perhaps, President Duterte wants to make a hard decision during the same month on the so-called third telecommunications company, or telco for short, to come into operation here in our country.

A year ago, President Duterte offered to China the “privilege” to operate a third telco to break the existing duopoly in the country. The offer was made during the bilateral meeting between him and Chinese Premier Li Keqiang in Malacañang in November last year.

The “bring in China” was made a year ago for a third telco to be operational first quarter of this year, specifically last March. This, however, did not materialize due to the delays on the part of the National Telecommunications Commission (NTC).

Later in July, President Duterte specified the third telco player in our country should be “reliable, inexpensive and secure” while glossing over the NTC delay.

Talks are circulating on the possibility of ZTE coming to life again under the third telco bidding. China Telecom is one of the seven foreign companies which manifested interest in joining the bid. The others are Telenor of Norway, Korea Telecom, LG Uplus of Korea, Vietnam Telecom, a Japanese firm and an American telecom firm.

China Telecom is said to be partnering with Dennis Uy’s businesses in Davao and Pampanga, backed by the largest bank in the country. The frequency band of 3.3 to 3.4 ghz is one of the primary frequencies covered by the NTC Memo Circular 09-09-2018 that China Telecom offers.

Various countries have banned China’s major telecommunications companies on national security grounds. There is the US Department of Commerce ban on ZTE. Australia banned China’s Huawei, ZTE from work on 5G networks last August 2018.

Concerns are also growing in European Union (EU), “particularly among intelligence agencies and politicians increasingly alarmed at Chinese purchases of strategic companies, that the company’s products could be used by the Chinese government for espionage.” The worries concern the potential for secret “backdoors” in Huawei’s code that critics say would “give Beijing access to European personal information or allow it to steal Western technology.”

In the latest presidential outburst, President Duterte warned if the deadline is not met again, he will intervene already and just call the bidders to attend and he will decide right away who gets what. In short, damn the torpedoes!

The choice of a Chinese telco to be the third player would thus become a “political” decision. Since backed by Chinese companies’ capability is proven considering the millions of consumers in China being serviced by such telco.

That the foreign partner will definitely be China at 40% and what is being selected by NTC is just the local player? And as some observers rightly pointed out, NGCP is the most viable option. The NGCP, which controls the cables that underpin the country’s power transmission system, earlier declared its plans to diversify into telecommunication. For this purpose, they plan to ask Congress to amend its charter to allow it to do so. Obviously, taking this through the legislative process will take a lot of time.

Is the bidding then fait accompli?

Having a third telco player is one of the campaign promises of the former Davao City Mayor. President Duterte earlier said he would reveal his choice for the third major telco player by December. From among the interested bidders, he vowed to choose the bidder with the best service track record and not the bidder that offers the lowest price.

But President Duterte is rushing to get one legacy agenda done with. If the NTC process fails, President Duterte will decide who will be the third telco player.  All bets are in that China will get it and the agreement might likely be signed at the state visit here of President Xi.

President Duterte himself is scheduled to fly to Bali, Indonesia this week to attend the Association of Southeast Asian Nations (ASEAN) Leaders’ Gathering that will take place at the same time with the International Monetary Fund-World Bank (IMF-WB) annual meeting starting today.

While in Bali, President Duterte will join fellow ASEAN Leaders in a meeting later this week with the top executives of the IMF and the WB. The government of Indonesia, through its Ministry of Foreign Affairs earlier announced this meeting of the ASEAN Leaders Gathering expects “to enhance cooperation with the IMF, World Bank and the UN (United Nations) in achieving Sustainable Development Goals (SDGs) and demonstrate the success of ASEAN economic integration and regional financial stability.”

Accompanied by his key economic advisers, President Duterte will be able to take this opportunity to present at the annual IMF-WB conference about the Philippine economic growth experience in the discussion of “issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.”

In just an overnight trip to Bali, the 73-year-old President embarks on yet another backbreaking travel as speculations about his state of health swirls around him. Aside from the APEC summit in Papua New Guinea, the Chief Executive is slated to undertake a state visit to Kuwait and ASEAN Summit in Singapore one after the other next month.

For someone rumored to be “dying of cancer,” the President brought his youngest daughter and partner Honeylet supposedly for a quickie family trip to Hong Kong over the weekend. He tried but failed to quietly slip out of the country after media again got to know about it. Even belatedly, it spilled to media in the same way his quick visit to the hospital for a cancer test last week got out. Now on his mid-term in office, it should not be surprising why he wants the third telco project to come on stream not later this year.