October 30, 2017 9:04 pm JST  (Updated October 30, 2017 10:32 pm JST)

Countering China, Abe agrees $9bn aid package with Duterte

Dealing with North Korea a common issue for Japan, Philippines

MASAYUKI YUDA, Nikkei staff writer

Japanese Prime Minister Shinzo Abe, right, welcomes Philippine President Rodrigo Duterte before a meeting at the prime minister's official residence on Oct. 30.

TOKYO -- Japanese Prime Minster Shinzo Abe pledged Monday to deliver nearly $9 billion in aid to Philippine President Rodrigo Duterte to rebuild battle-damaged areas of Mindanao island and improve infrastructure throughout the country.

Abe and Duterte signed a joint statement agreeing to a public- and private-sector contribution worth a total of 1 trillion yen ($8.8 billion) for the rapidly growing Southeast Asian country of over 7,000 islands.

At the signing ceremony following the bilateral summit meeting, Abe said, "As he moves forward in his efforts to fight terrorism, and also for stability in Mindanao, we would like to provide our full support to President Duterte's approach." Duterte replied: "The Philippines and Japan are building a golden age of our strategic partnership."

The offer of aid over the next five years had basically been agreed by the two leaders in January, when Abe visited the Philippines. He gave further details of the package Monday, to which the Philippine leader agreed.

Another area of interest to both leaders is security in the South China Sea, over much of which China claims control. Duterte will chair the upcoming meetings of the Association of Southeast Asian Nations summit and the East Asia Summit in the Philippines in the first half of November.

The two leaders agreed that North Korea's provocations must be dealt with. Abe named the nuclear and missile programs, as well as a prompt resolution of North Korea's abduction of Japanese citizens, as common issues that Japan and the Philippines will work together to address.

Regarding Pyongyang's continuing missile launches and nuclear tests, Duterte, who chairs the ASEAN meeting this year, said, "We condemn these tests." He also urged North Korea to come back to the negotiating table to peacefully resolve the situation.

The fourth meeting between Abe and Duterte was aimed at deepening the strategic partnership between the two countries, and ended fruitfully for the Philippines.

Mindanao, especially the city of Marawi, has been hard-hit by fighting between government forces and Islamic fighters linked to the Islamic State militant group. The area has been under martial law since May, and Duterte recently declared victory over the militants.

Japan's aid is intended to help the swift rebuilding of Marawi as soon as martial law is lifted, and to restore lasting stability in the area.

The aid will also be used to improve infrastructure in the Philippines, which has lagged behind the country's rapid growth. Japan will provide financing for a subway in the capital, Manila, known for some of the worst traffic jams in Asia.

The Japanese government will help the Philippines with the construction and operation of the subway, which is estimated to cost eight hundred billion yen. Japan will consider extending yen loans for the project.

Japan will also provide funds for improvements to the country's train network, and for infrastructure to prevent disasters, supporting Duterte's drive to spur the economy, known as "Dutertenomics." The upgrades to the rail network include the country's first subway system in Manila, and a North-South commuter line between Clark and Los Banos on Luzon Island.

Japan also pledged to help the Philippines increase its power generation capacity and expand the use of liquefied natural gas. It also offered assistance with introducing Japanese-style terrestrial digital TV broadcasting and increasing broadband internet access.

The two countries vowed to crack down harder on illegal drug trafficking, and to cooperate on coastal surveillance. The coast guards of Japan, the Philippines, Malaysia, Vietnam and Indonesia will conduct joint training exercises in Manila. "We hope that this will be a model for our cooperation," Abe said.

By providing aid, Japan aims to strengthen its ties with the Philippines, which, in addition to being current chair of ASEAN, plays a key security role in the South China Sea, where China has been building an economic and military presence.

Duterte has been carrying out a balancing act between Japan and China to secure economic support from both sides to sustain his popularity at home and deliver on his Dutertenomics program.

China has pledged $24 billion in aid to the Philippines, and the funding competition between Japan and China may continue to escalate, creating further growth potential for the country.

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