DIRECT investments from the People’s Republic of China in the first 21 months of President Duterte’s administration totaled $1,050 million, three times bigger than the $313 million in Chinese capital that came into the country in the same period during the administration of former President Aquino 3rd. This is according to data from the Bangko Sentral ng Pilipinas, available to the public at its website.
This so totally belies claims by Yellow leader Sen. Franklin Drilon that the Philippines got a measly $31 million worth of foreign direct investments (FDIs) from China in 2017.
The BSP data shows that for the year 2017, FDI from China totaled $134.6 million. FDI from July 2016 (when Duterte assumed office) to the end of that year totaled $585 million, with $330 million from January to March 2018, the latest period for which data are available.
The level of Chinese foreign capital going into the country roughly mirrors the overall picture of total toreign direct investments of $16 billion during Duterte’s first 21 months in office, which is is four times the $4 billion investments during a similar period under former President Benigno Aquino 3rd.
That Chinese investments in the country have surged under Duterte is of course not at all surprising. Duterte reversed the previous administration’s policy of antagonism towards China. Such a stance was Aquino’s and his foreign secretary Alberto del Rosario’s psychological defense mechanism as well as a smokescreen to cover up their bungling of the Panatag Shoal stand-off that led to our loss of that area so close to Zambales. (Among my many columns explaining this, read my June 25 piece “Aquino, Del Rosario and media hid the loss of Panatag to China from the nation.”)
Duterte went out of his way to mend fences with China, making three official visits in the two years that he has been in office, where he had talks with Chinese leader Xi Jinping, with his Cabinet secretaries touching base with their counterparts.
It was actually President Gloria Macapagal-Arroyo who undertook the country’s “pivot to China,” recognizing it as an economic superpower in our part of the world, and calling for less dependence on the United States, the hegemonic power in the region since World War 2. That of course piqued the US so much that there have been allegations that it helped not only in the massive anti-Arroyo propaganda but in Aquino’s rise to power.
The accompanying chart shows that Chinese investments in our country started to rise in 2007, during the Arroyo administration. From January 2005 to June 2010 when she stepped down from power, Chinese FDIs totaled $826 million — a staggering amount compared to the measly level of her predecessors. The momentum of Chinese FDI continued when Aquino assumed office, as most of Chinese companies’ plans to go to the Philippines made during Arroyo’s watch — as is the nature of all business operations — materialized only in 2010 and 2011.
The Panatag (Scarborough) Shoal crisis involving China, triggered by Aquino’s deployment of the Navy warship BRP Gregorio del Pilar to arrest Chinese fishermen, broke out in May 2012, with Aquino and del Rosario bungling it when they ordered our vessels out of the area, resulting in our losing Panatag. Senator Antonio Trillanes 4th has claimed that it was del Rosario who ordered the pull-out, without getting Aquino’s clearance.
Mad at themselves or at China for losing the shoal, the Aquino government filed an arbitration case in 2013 against the superpower’s claims to all of the South China Sea with the Permanent Court of Arbitration in the Netherlands. This further angered China, which viewed it as a US-backed move to paint it in the global community as an aggressor. Chinese companies divested in 2012 and 2013, so that China’s net FDI to the country in both years were negative at $65 and $23 million, respectively.
The level of Chinese investments did recover in 2014 and 2015, mostly going to mining companies. Duterte’s efforts to rebuild our frayed relationship with China obviously worked, with Chinese FDI surging in 2016 and 2017 to $631 million and $558 million, respectively.
We’re fortunate that Duterte has fast mended our spat with China, whether we like the Chinese or not. Hand in hand with its growth as an economic superpower, and not coincidentally after it had lifted out of extreme poverty (according to World Bank accounts) 800 million of its citizens from 1988 to 2013, Chinese investments overseas — as most economic powerhouses have in the past — have grown exponentially in the past several years.
The London-based Financial Times in a 2015 article pointed out: “In barely a decade, Chinese foreign investments have gone from virtually nothing to more than $100 billion a year, launching it into the top three exporters of direct investment globally. Based on the historical experiences of other countries, China’s global stock of outbound foreign direct investment … will grow from $744 billion to as much as $2 trillion by 2020.”
Our leaders would have betrayed the nation if they insisted on continuing to be antagonistic to China. We will miss the wave of Chinese investment overseas if we adopt the kind of quarrelsome stance with China that Aquino and del Rosario — and recently by Supreme Court Justice Antonio Carpio — espouse.
There had been an episode in the past when we were forced to miss the wave of investments from another economic powerhouse — Japan. In 1986, Japanese Mitsui executive Noboyuki Wakaoji was kidnapped, frightening of course Japanese executives who begged not to be assigned to Manila. Because of that, Japanese capital leapfrogged our country in their great migration abroad that was the result of the yen’s devaluation in 1985 forced by the Western powers. Most went to Malaysia and Thailand, triggering those two countries’ economic growth.
It was the communist-led New People’s Army, particularly its urban-based Alex Boncayao Brigade, that was blamed by some quarters for the kidnapping, although the Cory government refused to pursue that lead. To this day, it hasn’t been proven conclusively who the perpetrators were.