Philippines open to Chinese money to finance growth, development
By Hidetoshi Takada
OSAKA, Japan, NNA – The Philippines is open to Chinese aid and investment to boost the economy despite a lack of public support for letting Beijing’s checkbook diplomacy dictate the future of the Southeast Asian country.
“China has promised more funding for more projects,” Ernesto Pernia, secretary of the National Economic and Development Authority told NNA on Friday during a visit to Japan to attend an investment forum.
Under its “Build, Build, Build” program, Manila plans to invest a total of 8.3 trillion pesos ($160 billion) in infrastructure and social services. The government has earmarked 2.2 trillion pesos for 75 big-ticket projects, such as the Metro Manila Subway, the country’s first subway system. Funding for 56 of the projects will come from official aid largely from major economies, Pernia said.
President Rodrigo Duterte and Chinese President Xi Jinping met in Manila last November and agreed on China’s participation in the BBB program along with joint exploration of natural resources, namely oil and gas in the South China Sea.
The Philippine government has agreed with China on funding for four projects – two loan facilities and two grants worth “a little less than 250 million pesos,” according to Pernia.
China is the Philippines’ largest trading partner, followed by Japan and the United States, but it is a minor donor in terms of official development aid. Japan is the largest ODA donor to the Philippines with cumulative direct soft loans of 2.7 trillion yen ($24.4 billion) by March 2017.
Unlike Japan, China is a new ODA partner, which is why it is taking time to catch up with Tokyo’s level of aid funding, Pernia said.
Chinese firms plan to build large-scale integrated steel complexes on Mindanao island, which has received far less foreign direct investment than Luzon.
China’s HBIS Group Co., the world’s fourth largest steel maker, has partnered with Philippines’ SteelAsia Manufacturing Corp. to build a plant with an annual output capacity of 8 million tons, while China’s Panhua Group Co. also plans to set up a mill producing 10 million tons a year. Their investments will total $7.9 billion.
“The role of the government is just to make sure that these are legitimate, credible companies and companies with integrity,” Pernia said, adding that he recognizes need to attract more manufacturers to the country.
According to a nationwide survey by PulseAsia Research Inc. published last month, 60 percent of Filipinos said China is “not so trustworthy” or “not trustworthy at all”, while 39 percent had “a great deal of trust” or “a fair amount of trust” in China, compared to 84 percent in the United States, 82 percent in ASEAN countries and 75 percent in Japan.
China has for years asserted its sovereignty over a number of islands and reefs in the South China Sea claimed by the Philippines and other nations.