Ni hao! Philippines dials China for trade, infra, telco

ABS-CBN News

Posted at Nov 19 2018 08:26 AM

China's President Xi Jinping arrives at APEC Haus, during the APEC Summit in Port Moresby, Papua New Guinea Nov. 18, 2018. Xi is expected in Manila on Nov. 20 to 21. David Gray/Reuters

MANILA - Chinese President Xi Jinping arrives in the Philippines this week with Beijing's footprint in trade, infrastructure, tourism and telecommunications, a testament to what President Rodrigo Duterte once described as "springtime" in relations.

The welcome for Xi is a dramatic turnaround from his last visit 3 years ago, when then President Benigno "Noynoy" Aquino appeared to ignore him during a long walk to an APEC Summit venue, the awkward encounter captured by international TV cameras.

Duterte refused to flaunt the Philippines' victory against China in a UN-backed arbitration panel when he took over from Aquino in June 2016 as he sought to shift Manila closer to Beijing and away from its traditional ally, Washington.

He reset ties with China during a state visit to Beijing in October 2016 and came home with $24 billion in trade and investment deals. A travel advisory on Chinese nationals and a ban on Philippine banana exports were also lifted.

"We stand ready to stand by the Philippines and will always be your most sincere and trustworthy friend," Chinese State Councilor and Foreign Minister Wang Yi said during a visit to Davao City, Duterte's hometown, last Oct. 29.

Manila's chief diplomat, Foreign Affairs Secretary Teddy Locsin Jr, described Xi's visit as a "milestone" and a "continuation of a long and great friendship."

The Philippines is an "important link" in the Belt and Road initiative, China's plan to grow trade along ancient Silk Road routes to Europe, Wang said.

TRADING PARTNER

President of the Philippines Rodrigo Duterte (L) and Chinese President Xi Jinping attend a welcoming ceremony at the Great Hall of the People in Beijing, China, October 20, 2016. Thomas Peter, Reuters

Since Duterte reset ties with China, 2-way trade in 2017 alone topped $50 billion while Philippine exports grew 10.5 percent, Wang said.

Over 2 years, China bought more than 900,000 kilos of bananas, pineapples and mangoes, helping 40,000 farmers earn $1.5 billion, he said.

In August this year, China was the Philippines' top export destination with nearly $1 billion in receipts and accounting for 15.3 percent of the total, data from the Philippine Statistics Authority (PSA) showed.

China was also the top source of imports during the same period, with $1.92 billion in receipts or roughly double the value of exports, PSA data showed.

In the first 9 months of 2018, 972,550 Chinese tourists arrived in the Philippines, according to data from the Department of the Tourism.

While second only to Korea in terms of volume, January to September Chinese tourist arrivals grew 34.9 percent from the same period in 2017, while its share of total arrivals rose to 18.1 percent from 14.6 percent, the DOT said.

TELECOM, INFRASTRUCTURE PATRON

The logo of China Telecom is pictured at its booth during an expo in Guangzhou, Guangdong province, China July 27, 2017. Reuters/File

Two weeks before Xi's arrival, China Telecom, together with Davao City-based tycoon Dennis Uy, secured provisional rights to mount a challenge against PLDT Inc and Smart Communications.

Bank of China partnered with 13 Filipino banks to establish a yuan trading community to make transacting in the Chinese currency easier. The Bangko Sentral ng Pilipinas also included the yuan in its official reserves that has long been dominated by the US dollar.

Manila and Beijing agreed last August to fast-track infrastructure cooperation. Two bridges that cross the Pasig River in the capital are targeted for completion in 2021. A dam in Infanta, Quezon will also be built.

China is expected to nominate 3 contractors for the Subic-Clark railway and an agreement is expected to be signed towards the end of the year or in early 2019, the Department of Transportation said.

NEW CHINATOWN

The DoubleDragon Plaza in the Manila Bay area is shown in this photo taken on May 22, 2018. Property prices in the commercial area have gone up due to Chinese demand. Mark Demayo, ABS-CBN News

Chinese companies have also set up online gaming offices in Manila that employ Chinese-speaking workers, driving up property prices.

Prices in the Manila Bay area jumped 8 percent in the first 3 months of 2018. The increase is more than double compared to Makati, Ortigas in Pasig and the Fort Bonifacio in Taguig City, and is a bright spot in an industry that is faced with plateauing demand from business process outsourcing companies, data showed.

The expatriate Chinese workers are counted among POGOs or Philippine Offshore Gaming Operators, which took up 35 percent of office space in 2017, according to property tracker Colliers.

JOINT EXPLORATION HOPES

A Shaanxi Y-8 is shown in an airstrip in a base built by China on Subi Reef. Asia Maritime Transparency Initiative

Last March, PXP Energy said its chairman Manuel V. Pangilinan sent "feelers" to the China National Offshore Oil Co (CNOOC) for possible joint exploration in the disputed South China Sea.

In 2011, Chinese ships chased a vessel contracted by PXP Energy, then known as Philex Petroleum, away from the Reed Bank area. This stalled talks for a potential deal with CNOOC.

In November last year, the ASEAN and China agreed to start discussions on a framework for a code of conduct among claimants in the South China Sea.

By that time, however, China had already built artificial islands on many of the disputed reefs.

While a code of conduct may not be legally binding, Locsin said it would serve as a "standard" on how ASEAN can behave "always with honor, never with aggression and always for the mutual progress."

Wang said China was "ready to work" with ASEAN to "enhance dialogue and cooperation, overcome external disruptions."

The code, he said, will be a "stabilizer for the South China Sea."