PERRYSCOPE
Perry Diaz
Two years ago, President
Rodrigo Duterte – freshly installed as president – went on his maiden trip to
China, expecting a grand welcome. And yes, indeed, the Chinese gave
him a red carpet welcome with all the fanfare worthy of royal
visitors. For four days, he enjoyed the treatment accorded
him. Chinese President Xi Jinping welcomed him like a prodigal son who
was lost in the wilderness of America’s hegemony in Asia.
Duterte was impressed
with the Chinese “miracle” that brought the country, from the “The Sick Man of
Asia” to the world’s second economic power after the U.S. Heck, he
must have mused: “If China could do it, so can we.” He
probably figured that if there’s one country that can help him make the
Philippines into another economic power, it’s China, not America.
And before he wrapped up
his state visit, Duterte spoke before an audience of China’s corporate
leaders. He announced – to the whole world – his military and
economic “separation” from the United States. “America has lost now.
I've realigned myself in your ideological flow," he told the CEOs in
Beijing. "And maybe I will also go to Russia to talk to Putin and
tell him that there are three of us against the world: China, Philippines and
Russia. It's the only way."
Sweetheart
deal
Xi must have been
tickled pink when he heard Duterte “divorcing” himself from a marriage with
America that he believed didn't do any good to his country. He has
been saying that China’s financial help was the key reason for his pivoting to
China. In reciprocation to Duterte’s “pivot,” China was going to treat him like
her new “little brother,” who’s coming home at last.
Indeed, Duterte’s state
visit to China was a resounding success. And as a “dowry,” the
Chinese offered him a “sweetheart deal.” Duterte signed a total of
27 deals -- $9 billion in “soft loans” and $15 billion worth of direct investments
from Chinese firms in railway, port, roads, energy, and mining
projects.
Everything seemed to be
going just fine since Duterte came back home with deals totaling $24
billion. Now, he can proceed with his pet project, “the golden age
of infrastructure” under his ambitious “Build, Build, Build” program, which
would be in lock steps with Xi’s ambitious “One Belt, One Road” global
initiative to connect three continents from Asia to Europe to Africa.
Where is
the money?
A year later, I read a
news item, titled: “Is China withholding funds from
Duterte?” “Beijing's pledge to deliver $24 billion in aid and
investment to the Philippine leader's government and hometown has failed to
come to fruition,” the report said. What’s going on?
Many experts and
analysts had suggested that China might have been withholding the funds until
the “bilateral relationship” is firmly consolidated. And most
importantly, how the two countries would resolve their territorial disputes in
the West Philippine Sea (WPS).
Okay, so that’s what
China had wanted all along, huh? It has always been
exploration for oil in the waters off the coast of Palawan, particularly the
mineral-rich Recto (Reed) Bank. Think about this: The WPS has
an estimated 11 billion barrels of oil, 190 trillion feet of natural gas,
and 10 percent of the world’s fishing resources. Isn’t that enough
for Xi to drool?
If China takes full
control of the WPS, her foreign oil imports – which accounts for 80% of her oil
consumption -- from the Middle East and East Africa passing through the Malacca
Strait to China would be drastically reduced. That would certainly
resolve China’s “Malacca Dilemma.”
Duterte must have
realized then that Xi had taken him for a ride, professing that China was there
to help his “little brother,” which reminds me when Americans used to call the
Filipinos, “little brown brothers.” So, what else is new?
Slowly, Duterte began
shifting back towards America, asking her to provide assistance in combating
the threat of international terrorism in his country. Duterte’s move was
subtle, but Xi is a master strategist. He has an eye for
subtleties. Nobody in his sane mind would loan $24 billion without
assurance and a guaranteed collateral. But while “assurance” is
cheap and easy to give, “collateral” is a more serious and complicated
situation because it’s not for Duterte to give and he knows it. He
has to deal with the Constitution’s restrictions when it comes to sovereignty
and territorial integrity.
Joint
exploration
Another year passed and
only two projects were completed: an irrigation project worth $73
million, and two bridges in Manila worth $75 million. That’s a total
of only $148 million! What about the other $23.852 billion?
Indeed, the biggest
concession that Duterte was willing to give China was a joint exploration of
the WPS. But why would he offer such a concession with nothing in
return? During his last trip to Beijing, Duterte told Xi, “We
intend to drill oil there, if it’s yours, well, that’s your view, but my view
is, I can drill the oil, if there is some inside the bowels of the earth
because it is ours.”
Xi’s response
was: “We’re friends, we don’t want to quarrel with you, we want to
maintain the presence of warm relationship, but if you force the issue, we’ll
go to war.” Ooops! That must have scared the hell out of
him. He’s been telling everybody, including the Chinese, that
the Philippine military would be massacred in a war with China. He
was being defeatist; he shouldn’t have said.
Principled
pragmatism
That left Duterte with
one option, which is to use what diplomats call “principled pragmatism.” It’s a
strategy “designed to get maximum results from a delicate situation,
without sacrificing anything,” which is done by finding common ground of
interest. The idea is to get the most from the country’s aggressor –
China – without provoking her.
There is another term
for “principled pragmatism.” It’s called “shakedown,” which is what
organized crime use to extort from business owners. Typically, a
couple of mobsters would go to the place of business. They’d accuse
the business owner that he is doing business in the mob’s
territory.
They would then give the
owner several options: Relinquish ownership of the business or share
the profits. If the owner agrees to share profits, the mobsters will
tell the owner that he is now under the mob’s “protection.” Which
reminds me of Xi’s promise to “protect” Duterte from any plan to remove him
from office.
It did not then
come as a surprise when early this year, Duterte proposed a 60-40 split for any
joint oil exploration with China. He reasoned, “Rather than
fight, what can we get?” What he’d get is the Xi’s protection.
But we don’t have to
fight and we don’t have to give up our rights to the WPS either. I
happen to believe – like many Filipinos do – that China will not go to war
against us. That’s the least she would do because she could lose the
economic power she had built over the past 40 years.
Remember also that the
Philippines is protected by the U.S.-Philippines Mutual Defense Treaty
(MDT). Duterte shouldn’t wait and should begin oil exploration
now. To delay it further would only give China more time to build
more bases in the WPS and deploy warplanes, missiles, and warships that are
within striking distance of the entire country.
The Philippines should
also consult with the U.S. (her treaty ally), the ASEAN nations, the other
claimants to the disputed region, and the other U.S. treaty allies – Australia,
Japan, South Korea, Taiwan, and Thailand. They all share common
interest in the region.
Maybe Duterte should
change his belief that “We cannot win a war with China” and instead adapt the
mantra, “No guts, no glory,” which poker players use effectively.
At the end of the day,
one wonders: What happened to the Philippines’ “sweetheart deal” with
China? It would have been mutually beneficial without bringing the
territorial disputes in the WPS into the overall calculus. But
Duterte failed to see beyond the $24-billion loans from his “big brother.”
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