Almost two years after China pledged $24 billion in investment to the Philippines, barely any projects have materialized, prompting deepening concerns that President Rodrigo Duterte has undermined the country’s sovereignty with little to show in return.
Of the 27 deals signed between China and the Philippines during Duterte’s visit to Beijing in October 2016, China originally agreed to provide $9 billion in soft loans, including a $3 billion credit line with the Bank of China, with a further $15 billion worth of direct investments from Chinese firms in railway, port, energy and mining projects. It didn’t specify a timeline.
Since then, the Philippines has completed only one loan agreement with China worth $73 million to fund an irrigation project north of the capital, Manila, according to Economic Planning Secretary Ernesto Pernia. Two bridges in Manila to be funded with Chinese grants worth up to $75 million were inaugurated last week.
The process of securing loans from China “seems to be moving slower” compared to getting assistance from other countries such as Japan, Pernia said at a briefing earlier this month.
Duterte has repeatedly touted China’s financial help as a key reason for pivoting away from the U.S. and Europe, which he says haven’t produced material gains for the Philippines. Yet while Beijing remains the Philippines largest trading partner, when it comes to foreign direct investment, China is outranked by Japan, the U.S., the Netherlands, South Korea and Singapore.
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