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MANILA: Overflowing with marine life, the waters of Scarborough Shoal are a haven for valuable fish such as yellowfin, grouper and red snapper.
A fishing expedition there can earn fisherman Federico Josol three times more money than fishing in the waters of his hometown Masinloc, the closest point to the Bank of the Philippines in the Philippines.
But every trip to the bank, located about 140 miles off the Philippine coast, carries risk. And recently, he had a painful encounter with the Chinese Coast Guard.
“They said it was their territory. We were scared because they had weapons. They were ramming our ships and forcing us to leave, ”he recalls. “It’s nothing but intimidation.”
The Philippines and China have been embroiled in a sovereignty dispute over the sandbar, where Chinese Coast Guard boats intimidate and drive off Filipino fishermen.
Chinese Coast Guard vessels patrol in front of Philippine fishing boats in the disputed Scarborough Shoal. (FILE PHOTO: Reuters / Erik De Castro)
In 2016, an arbitral tribunal in The Hague dismissed China’s claim over the shoal, but Beijing rejected the ruling.
The tension in the South China Sea has contributed to rising anti-China sentiments in the Philippines, but critics say President Rodrigo Duterte has downplayed the problem and done little to get China to respect his country’s maritime rights.
Since coming to power in 2016, he has turned away from the United States and closer to China in exchange for billions of dollars in promised Chinese aid, loans, and infrastructure investments.
But four years later, much of the investments promised by Beijing have not materialized. Amid growing concern, the Insight program explores whether concessions made to China, in the maritime dispute and more, may have been for nothing.
OBSERVE: Will Duterte’s pro-China policies pay off for the Philippines? (46:25)
PROJECTS STATES
The centerpiece of the Duterte administration’s economic policies is the “Build, Build, Build” (BBB) program, which consists of some 20,000 infrastructure projects including airports, seaports and highways.
With financing from China touted as the best option to improve the country’s infrastructure, the Philippines was poised to usher in a “golden age of infrastructure.”
But less than five percent of China’s promised $ 24 billion ($ 32 billion) loans and investments have materialized. “They’re taking Duterte for a ride,” says political analyst and author Richard Heydarian.
“You have done a lot for China and yet what did you get from China in return? To this day, there are practically no expensive infrastructure projects from China. “
One such project is the Kaliwa Dam project. Considered as a solution to water problems in Metro Manila and the surrounding regions, it includes the construction of three dams to serve 17.5 million people.
An aerial shot of Manila.
But the initiative has stalled, as China “is taking a pretty tough negotiating line” to ensure “these projects are worth commercially worth,” said Peter Mumford, head of Southeast and South Asia practice at the risk consultancy. Eurasia Group.
The project has also been delayed by protests from environmental groups and local officials concerned that it would cause flooding and the displacement of thousands of indigenous people in the Rizal and Quezón provinces.
The Daraitan village in Rizal, for example, could be at risk of being submerged by the construction of the dam, and Melody Alao, a tour guide in the area, would lose her livelihood.
“It will affect not only tour guides like me who depend on tourism, but also those involved in transportation, cafeteria owners, street vendors, shops … and so on,” says Alao, whose income helps send his daughter daughter to school.
“We can’t do anything about it, except maybe appeal to the government.”
The Kaliwa dam project would require the relocation of about 1,500 families.
Leon Dulce, the national coordinator of the Kalikasan People’s Network for the Environment, believes that the environmental impact associated with the dam outweighs the potential benefits.
“(The project) is basically a Pandora’s box of various threats to people,” he says. “This relationship between Duterte and China is a very toxic relationship that results in the victimization of the Filipino people.”
However, Daraitan district president Rodel Hinagpisan is optimistic that the Duterte administration will protect the communities there.
“(The government) assured us that we will not dive,” he says. “It is for the common good: there is a shortage of water in Metro Manila, (otherwise) the dam would not be built.”
DEBT-TRAP DIPLOMACY
While projects like the $ 211 million Kaliwa dam remain a priority for the Duterte administration, experts say the Chinese loans needed to fund a large portion of the BBB program are expensive, with high interest rates.
The Kaliwa Dam and some other “Build, Build, Build” projects fall under the Belt and Road Initiative.
China is also known for financing infrastructure projects in poorer countries and then demanding concessions in exchange for debt relief, a trend called “debt trap diplomacy.”
“Profit is always the bottom line. And that is why they (China) choose to continue with the Kaliwa dam project, ”says Dulce. “We run the risk of giving up all these resources to China if we default on the loans.”
The Philippines should have considered other funding options, says Jay Batongbacal, director of the Institute of Maritime Affairs and Law of the Sea at the University of the Philippines.
READ: The World Bank approves a financing of 900 million dollars for two projects in the Philippines
Loan agreements with Japan or South Korea, for example, would have met “social acceptability requirements,” he argues. “(This means that) local communities would also approve these projects, not just the national government.
“The Chinese loan agreement does not foresee that. So I think the intention was just to go ahead and build these things without considering (their) impact on local communities. “
The Kaliwa dam project ignores the rights of local communities, say activists and some academics.
Japan’s loan proposal for the Kaliwa dam, for example, involved microhydraulic projects and forest restoration, Dulce cites.
International development projects must also comply with “safeguards against corruption” and a minimum amount of local labor. However, China “has not been able to meet all of these strict requirements,” adds Batongbacal.
Infrastructure projects in the Philippines were expected to provide employment for more than 21,000 residents. But there is growing concern about the high proportion of Chinese workers on these projects.
“It is really the Chinese companies and workers who benefit, not the Filipino people,” says Heydarian.
WATCH: High influx of Chinese workers in the Philippines
TIME TO RE-THINK THE PIVOT?
There is also growing public resentment over the South China Sea problem. On the one hand, China’s reclamation activities, massive harvesting of giant clams and overfishing are damaging the reef ecosystems in Scarborough Shoal and the Spratly Islands.
Chinese ships fish in the disputed Scarborough Shoal. (FILE PHOTO: Reuters / Erik De Castro)
According to Philippine marine scientists, the Philippines is losing about 33 billion pesos (S $ 911 million) annually from damage in these areas, reported Inquirer.net, the news website of the Philippine Daily Inquirer.
Batongbacal also tells Insight: “China has continued to destroy the Scarborough Shoal since 2012. And essentially, the (Philippine) government turned a blind eye to this to present this atmosphere of… China sympathy. I think that has become increasingly unsustainable. “
In recent months, divisions have formed within the Philippine government over Duterte’s turn in China, and there has been public pressure to take a tougher stance on Beijing.
For example, citing security concerns, Philippine Navy Chief Vice Admiral Giovanni Carlo Bacordo publicly opposed relocating a naval base to make room for a Chinese-built airport.
“(The base) guards the entrance to Manila Bay, and Manila Bay is the center of gravity for the national government. If Manila falls, the whole country falls, ”he told Inquirer.net in September.
So should Duterte change tack and rethink his strategy in China? The director of the Asia Maritime Transparency Initiative, Gregory Poling, believes the president is already “responding to the fact that his policy towards China has abjectly failed.”
Mr. Gregory Poling.
Duterte, for example, suspended the decision to cancel the Visiting Forces Agreement, a security pact with the United States.
“I needed loans, investments and help (from China), and none of that came out,” says Poling.
“He realizes that if he continues like this, it will only make him look weak. It hurts his political brand and hurts his successor, whoever he decides to anoint for the 2022 presidential race. “
Batongbacal says that since Filipinos are not convinced that the pivot has produced “tangible benefits at this point,” Duterte probably “expects China to provide the Philippines with free COVID-19 vaccines.”
“That is his last card he can play to save his policy towards China,” adds the professor.
Check out this episode of Insight here. The show airs on Thursdays at 9pm.
Philippines COVID-19 Frontline Workers in Action.
