In October 2016, President Rodrigo Duterte’s visit to China brought an earmarked $24 billion worth of Chinese foreign direct investment (FDI) and overseas development aid (ODA) for the Philippines. After signing the memoranda of understanding (MOUs), both supporters and detractors of the deal expected an uptick in Chinese investments and an expanded role for Chinese state-oriented enterprises (SOEs).

A year and a half later, newspapers have argued that the predicted boom has failed to materialize. Indeed, the prevailing media narrative is that China encouraged the Duterte administration to concede the South China Sea in exchange for an investment boom that has yet to come. While this perspective may have some merit, the point that Chinese investments have barely increased is simply untrue. According to actualized FDI data of the Central Bank of the Philippines, which is recorded by examining bank deposits and conducting surveys with investors, China and Hong Kong’s FDI inflows had already reached $1.04 billion by March 2018. This amount has surpassed the entirety of Chinese and Hong Kong investment received under President Gloria Arroyo ($828 million) and already reached five-sixths of the $1.2 billion under Benigno Aquino’s term.

Following this analysis, I suggest that there is a disconnect between the public expectation of what a “major investment boom” is and the actual financial changes that occurred...

Read more ...

^{Image Credit: Philippine National Mapping and Resource Information Authority. Published in Bautista, Lowell. 'Philippine territorial boundaries: internal tensions, colonial baggage, ambivalent conformity' (2011) 16 (December) Journal of Southeast Asian Studies 35-53.}

The Consultative Committee has presented to President Rodrigo R. Duterte the Draft Federal Constitution. Below are some comments that may be made in respect of the provision on National Territory contained in the draft which has been released online.

Read more ...

In recent months there has been significant debate regarding the merits of Chinese infrastructure financing. Chairman Xi Jinping’s signature Belt and Road Initiative (BRI) promises to reshape Eurasia and cement China’s great power status. But despite an obvious needed for infrastructure investment in the region, the downsides of such rapid and large financial flows are becoming apparent, posing a tricky challenge for debtor governments in balancing the significant opportunities against equally large risks.

As part of a broader trend towards warmer ties, Manila has increasingly looked to Beijing to fund the Duterte administration’s signature USD $180 billion ‘Build, Build, Build’ spending program designed to overhaul the nation’s infrastructure. China has proven a willing lender, offering more than $7.3 billion in financing for major projects including the USD $3 billion southern line of the North-South Railway, USD $374 million Kaliwa Dam Project in Quezon province, and USD $53.6 million Chico River Pump Irrigation Project among others. However, this assistance has not come without controversy.

Read more ...

Last week, the Asia Pacific Pathways to Progress Foundation and the Griffith Asia Institute co-hosted a Philippines–Australia Track II dialogue in Manila, focusing on the security dimension of the relationship. It brought together academics, analysts and practitioners to talk about the security challenges facing both countries, as well as their policy responses. A key message for Australia was the need to think about options for further strengthening our strategic ties with this important Southeast Asian state beyond the battle for Marawi.

The terrorist siege in that southern Philippine city provided Canberra with an opportunity to boost defence relations by supplying much-needed assistance. The provision of surveillance support to the Armed Forces of the Philippines, in the form of AP-3C Orion aircraft, was particularly valued. Since then, the Australian Defence Force has stepped up its engagement by training Philippine soldiers in combined urban operations to enhance their capacity to address similar scenarios in the future.

Read more ...