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Duterte should not rush Chinese infrastructure investments

Despite security concerns, Philippine president wants concrete progress

| Philippines
Rodrigo Duterte shakes hands with Xi Jinping in Beijing in April 2019: the Philippines might be at risk of welcoming a Trojan horse.   © Reuters

As Philippine President Rodrigo Duterte enters the final years of his term in office, he has fast-tracked approval of big-ticket Chinese infrastructure projects with gusto.

In a brazen violation of constitutional principles on separation of powers, the firebrand Filipino leader has even threatened judicial institutions against reviewing potentially questionable deals with Beijing.

While these projects vindicate Duterte's promise of large-scale Chinese investments, they could also represent a significant threat to the Philippines' national security and long-term strategic interests. Key institutions, including the Philippine defense establishment, must ensure proper review and, if necessary, cancellation of risky investments from China.

The biggest of all is the $10 billion international Sangley Airport project right next to major Philippine military bases and just on the outskirts of the capital, Metro-Manila. China Communications Construction Company, a state-owned infrastructure business, will lead the project.

There is clearly an element of urgency at play. Right until mid-2019, the third year of Duterte's presidency, not even a single Chinese infrastructure project had begun construction. Two of the highest profile projects, the trans-Mindanao Railway and Subic-Clark cargo train, were either stuck in limbo or completely nixed.

Meanwhile, smaller projects, specifically the Chico River Pump Irrigation, costing $86 million, $72 million of which was due to come from China, and the Kaliwa Dam, at $410 million, were hounded by controversy as influential figures and civil society groups cried foul over environmental and debt trap concerns.

The backlash forced Duterte to initiate a comprehensive review of all Chinese projects, further delaying their implementation.

Crucially, the powerful Armed Forces of the Philippines and broader defense establishment also vetoed Chinese investment in strategic locations. Early last year, Philippine Defense Secretary Delfin Lorenzana publicly blocked a potential bid by Chinese port developers in Subic, the site of major naval facilities and joint military exercises with the U.S.

Even those supportive of Duterte's plans had been frustrated by the slow pace of the investments coming from China. Foreign Secretary Teodoro Locsin lamented during a public event in New York last year: "We signed up [to] this and that agreement [with China], but they hardly materialized."

But the tide has turned in the second half of Duterte's presidency. Duterte has used his immense political capital to expedite the Chinese projects. In fact, he endorsed China's investments, warning courts against issuing temporary restraining orders or judicial reviews.

Meanwhile, perturbed by the prospect of a dramatic shift in Philippine politics after the expiry of Duterte's term in 2022, China has begun doubling down on its efforts to gain a foothold in the Southeast Asian country's critical infrastructure and strategic sectors.

Despite widespread public criticism, the Kaliwa and Chico dam projects swiftly secured environmental compliance certificates from the Duterte administration, while the China Telecom-backed Mislatel consortium signed a cooperation agreement with the Philippine military.

Then there was the Sangley Airport approval too. In addition to concerns about the integrity of the bidding procedure, CCCC is highly controversial. Between 2009 and 2017, the World Bank blacklisted the company for questionable practices of its subsidiaries, with one allegedly involved in bidding collusion, the other allegedly in illegal reclamation activities in the South China Sea, including within the Philippines' Exclusive Economic Zone.

The project's location, next to major military facilities, including the Philippine Naval Installation Command, which supports the navy's operations, has also raised alarm bells. Former Philippine Navy chief Admiral Alexander Pama has warned that the proposed project represents "a dagger pointed to the heart of the nation."

Given the scale of the proposed international airport project, and the urgency of supplanting the heavily congested Ninoy Aquino International Airport in Manila, China's infrastructure development behemoths potentially represent a swift solution. But given the festering territorial disputes between the Philippines and China, major Chinese companies could potentially advanced an ulterior agenda for Beijing.

This is especially relevant as the Chinese Communist Party tightens its grip on state-owned companies: there are legitimate concerns over the security implications of China's expanding footprint in strategic locations and critical infrastructure in the Philippines. As a majority state-owned company with a checkered background, CCCC's proposed large-scale investment in such a sensitive location in the Philippines demands proper vetting and review by all relevant stakeholders, not only organs of the current Beijing-leaning administration.

It is imperative for the country's most important institutions, including the courts and defense establishment, to exercise independence and advocate for proper assessment of big-ticket Chinese projects in Duterte's final years in office.

Otherwise, the Philippines risks welcoming a Trojan horse with devastating long-term impact based on short-term calculations of an outgoing China-friendly president.

Richard Heydarian is an Asia-based academic, columnist and author of "The Rise of Duterte: A Populist Revolt Against Elite Democracy" and the "The Indo-Pacific: Trump, China and the New Struggle for Global Mastery."

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