Marcos pivot to US could affect Chinese infrastructure projects

By Kyle Aristophere T. Atienza, Reporter

CHINA might cancel infrastructure projects as punishment for the Philippines’ foreign policy pivot to the United States, political analysts said.

“Beijing may opt to shelve indicative projects that have not yet been finalized by both sides as a punitive action for the repivoting to Washington,” Terry L. Ridon, convenor of infrastructure think tank InfraWatch PH, said in a Facebook Messenger chat.

Tensions between the Philippines and China have worsened in recent months over their dispute on the South China Sea. A Chinese Coast Guard vessel almost collided with a Philippine patrol vessel carrying journalists on April 23.

Mr. Ridon said the Philippines should look for other development partners that can provide better loan terms and consider pursuing infrastructure partnerships with countries that are in line with its principles.

“It may also look for partners that appropriately reflect the current status of the country’s foreign policy alignment,” he said.

Improved US-Philippine alliance under the government of President Ferdinand R. Marcos, Jr. and increasing tensions with Beijing should not affect ongoing infrastructure projects funded by China, Mr. Ridon said.

“Our expectation is that the funds are available for the use of our agencies to push forward with project implementation,” he said.

The Chinese Embassy in Manila did not immediately reply to a Facebook Messenger chat seeking comment.

The April 23 incident happened just a day after Chinese Foreign Minister Qin Gang met with Mr. Marcos Jr. in Manila, where they agreed to open more “lines of communication.”

During the incident, a Chinese Coast Guard ship kept a distance of 50 yards (46 meters) from the Philippine vessel BRP Malapascua near the Second Thomas Shoal, which is within the Philippines’ exclusive economic zone.

The Philippine Coast Guard had spotted a swarm of more than 100 Chinese vessels during its April 18- 24 journey, it said.

“The escalating conflict in the West Philippine Sea could have a bearing on our infrastructure projects because China might delay their financing and construction,” said Chester B. Cabalza, founding president of Manila-based International Development and Security Cooperation.

“But it’s good that the Philippines has alternative partners for infrastructure projects,” he said in a Messenger chat. “Japan and Korea are among the biggest supporters of Manila’s infrastructure projects.”

The Philippines should start looking at alternative partners for China-backed infrastructure projects that may not push through, he said.

Japan remains the Philippines’ biggest infrastructure partner, Mr. Cabalza said. The same was true during the time of Mr. Duterte even if he made a pivot to China away from the US.

“In a way, it was the loss of China over its competitor Japan in infrastructure projects,” he said. “Filipinos have more faith in Japanese technology and infrastructure than China.”

Mr. Cabalza said the Philippines should diversify its economic partnerships and remain “militant and uncompromising” in its sea dispute with China.

Ex-President Rodrigo R . Duterte led a foreign policy pivot to China when he took office in 2016. He had been criticized for gambling Philippine territories to appease China in exchange for investment pledges, only few of which had materialized.

During his term, Chinese policy banks, state-owned enterprises and big private companies were encouraged to invest or operate in the Philippines. Chinese billionaires were also invited to move their savings into the Philippine online gambling sector.

China remains the Philippines’ largest trade partner, with the two countries’ total trade hitting $2.543 billion in February, according to the local statistics agency. Philippine exports to China reached $611.59 million, while imports hit $1.932 billion.

Mr. Marcos left Manila on April 30 for a five-day trip to Washington, where he met with US President Joseph R. Biden and other US officials.

Tensions have increased after Mr. Marcos announced a decision in February to give Washington access to four more military bases under their 2014 Enhanced Defense Cooperation Agreement (EDCA).

Aside from being vocal against China’s expansive activities in the South China Sea, the US has also criticized the Asian superpower’s aggression against self-ruled Taiwan. 

China has criticized the EDCA expansion, accusing Washington of endangering regional peace and stability.

EDCA banks on the 1999 visiting forces agreement and the 1951 Mutual Defense Treaty between Manila and Washington.

Philippine and American authorities have said the defense pact’s expansion is primarily aimed at improving the Philippines’ disaster response, dismissing claims that the US would use the deal in defending Taiwan against a potential Chinese attack.

Before leaving the US on May 4, Mr. Marcos said the EDCA expansion is a defensive step that would be “useful” if China attacked Taiwan.

While it was originally made to improve disaster response, “there’s an additional aspect to it,” he told Reuters. “And that is… tensions across the Taiwan Strait seem to be continuing to increase. Then the safety of our Filipino nationals in Taiwan becomes of primordial importance.”