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From 2016 to 2018, around 335,800 working visas and special work permits were issued to Chinese, representing over half the total number of permits issued to foreigners. (Photo by Kimberly dela Cruz)
Asia Insight

Duterte under the gun over Chinese influx into Philippines

President wants investment but rise in migrant workers riles critics

CLIFF VENZON, Nikkei staff writer | Philippines

MANILA -- The lobby of the Bureau of Immigration headquarters in Manila was bursting with scores of young Chinese seeking visas to work in the Philippines. Dozens more were being held in a cordoned-off area on the second floor.

The detainees -- mostly from mainland China -- were among 276 suspected of working illegally in the online gambling industry at a site near the Makati business district. They were arrested last month in one of the biggest raids in the Philippine capital, and were facing deportation.

There "are so many we have to book them by batches for questioning," one immigration officer said.

The raid was part of a clampdown on undocumented Chinese workers in the country, as President Rodrigo Duterte's government scrambles to contain a side effect of his economic pivot to China.

The number of Chinese nationals arriving in the country has nearly tripled since Duterte came to power in 2016. They filled hotel rooms and office towers previously intended for U.S. call centers, snapped up condominiums and boosted retail sales. But despite the economic benefits, there has been a mounting backlash from locals who fear Chinese workers are taking jobs, evading taxes and committing crimes.

"I'm afraid mafias have entered the country," Senate labor committee chair Joel Villanueva said on Feb. 21 during a congressional inquiry on the influx of Chinese workers.

The hearing was conducted even as Congress was on a three-month recess, underscoring how the arrivals have become a major political issue ahead of key midterm elections in May. At least one senate candidate has questioned Duterte's will to crack down further.

While doing so could appease local critics, it could also mar relations with Chinese President Xi Jinping. In addition, there is concern that harsher treatment of the immigrants could backfire on the roughly 30,000 Filipinos working in China. That number excludes the more than 200,000 in Macao and Hong Kong, where many work as maids.

Duterte has been tiptoeing around the issue. In November, he said illegal Chinese workers should be deported but cautioned authorities to "be careful" in handling such cases. Last month, he called for tolerance, saying, "Let them work here."

Lucio Blanco Pitlo, a lecturer in the Chinese program at Ateneo de Manila University, said the problem "is overplayed and politicized" and warned of consequences.

"The issue has adverse implications on Duterte's efforts to cultivate friendlier ties with China to corner more investments," Pitlo said. It could also hurt the 8 trillion peso ($154 billion) "Build, Build, Build" infrastructure program, which is partly being funded by Beijing, he added.

Salvador Panelo, presidential spokesperson and legal counsel, said on Feb. 26 that the Chinese ambassador in Manila warned the Philippines about deporting Chinese workers "recklessly" and "not in accordance with the law."

"[They] will also do the same," Panelo said. "That's tit for tat."

Panelo later walked back his statements after the Chinese Embassy issued a denial.

When he assumed the presidency in June 2016, Duterte sought to earn Beijing's trust, which had been eroded by former President Benigno Aquino's hard-line approach on the South China Sea territorial dispute. Duterte shrugged off Manila's arbitration victory against China over the dispute and declared a "separation" from the U.S. during his first visit to Beijing in October that year.

In return, Beijing pledged to bankroll Duterte's infrastructure projects, import more Philippine fruits and lift a travel warning on the country. Manila, meanwhile, offered Chinese visitors visas on arrival.

China quickly became the largest source of tourists for the Philippines, dislodging South Korea. Last year, the Philippines welcomed a record 1.26 million Chinese visitors, nearly triple the number in 2015.

The immigration bureau in Manila receives a steady stream of Chinese nationals seeking visas. (Photo by Kimberly dela Cruz)

Duterte's government went further in September 2016, offering licenses that allow companies to set up internet-based casinos for overseas gamblers. China-linked companies bagged many of the 54 "Philippine Offshore Gaming Operator" licenses. The operators brought with them dozens of companies providing information technology support and call center services manned by Mandarin-speaking mainlanders.

On a visit to China the following month, Duterte secured a $24 billion investment deal from Chinese institutions, including grants for projects that allow Chinese companies to bring in their own workers. The two Beijing-funded bridges crossing the Pasig River in Manila are examples.

From 2016 to 2018, around 335,800 working visas and special work permits were issued to Chinese, representing over half the total number of permits issued to foreigners. More than half of them were for online gaming-related jobs, and the rest for sectors including construction, information and communications.

"The influx of Chinese workers is a direct consequence of the growth of the Philippine offshore gaming," immigration chief Jaime Morente said during the Feb. 21 hearing. The online gaming industry's revenue ballooned to 7.35 billion pesos last year from 657 million pesos in 2016.

But many Chinese tourists who entered the Philippines ended up overstaying to find jobs. Others bribed immigration officials to get working visas. Opposition Senator Franklin Drilon, a former labor secretary, said last year that around 400,000 Chinese workers -- including those without documents -- were in the country.

The immigration bureau came under pressure to take action, due to political considerations as well as a slew of reports of abuse, such as the case of an undocumented Chinese chef beating a local waitress in May 2018.

The bureau said that last year, 393 of the 533 illegal workers arrested were Chinese, and that it banned the entry of more than 1,500 others. Morente said the number of arrests jumped by four times last year.

In January, the bureau announced it would no longer issue special work permits for blue-collar jobs, such as construction workers, waiters, cashiers and janitors.

The Federation of Free Workers, a local labor group, has urged the government to "focus on protecting our jobs from being taken by illegal aliens." The Trade Union Congress of the Philippines, also a labor group, reminded the government that "all jobs including skills and professions must be given to Filipino workers and professionals" unless there is no one available in the local labor market.

President Rodrigo Duterte has been tiptoeing around the issue of the increasing number of Chinese entering the country.   © Reuters

Jobless Filipinos made up 5.1% of the working-age population last year, a marginal improvement from the 5.5% rate in 2016.

The Chinese influx is straining the social fabric in other ways. Filipinos' trust in China has improved under Duterte, but it remains low compared with countries such as the U.S., Japan, and Malaysia, based on a poll by Social Weather Stations in September.

Crimes committed by Chinese have grabbed headlines. In mid-February, a 23-year-old Chinese woman hurled a cup of soy pudding at a police officer after she was barred from boarding a train with her food. The incident triggered an online fury and the woman is facing deportation.

Vice President Leni Robredo, who belongs to an opposition party, said: "This is not just an insult to the police officer, but an insult to our nation."

The Philippine police said the number of Chinese who were involved in crimes -- as suspects or victims -- tripled to 398 last year from 2016, accounting for around 40% of all cases involving foreign nationals.

While Duterte is treading cautiously, his cabinet is keen to show it is on top of things. The labor, finance and trade secretaries have joined the heads of the tax, immigration and gaming bureaus to form an "interagency committee on the influx of foreign nationals," Labor Secretary Silvestre Bello said. The first high-level meeting discussed ways to stop tax avoidance by Chinese workers, as the government scrounges for revenue after exceeding its budget last year for the first time in nearly a decade.

Finance Secretary Carlos Dominguez also said he wants to keep closer tabs on online casino workers, citing "the national security implications of their large presence in the country."

But Gary Alejano, a congressman and Senate candidate for the opposition in the May elections, has doubts about the clampdown. "It's like confiscating a few kilos of shabu (meth) and allowing tons to come in," Alejano said, referring to the 6.4 billion pesos of illegal drugs from China that slipped past customs last year.

Alejano, a former military officer, believes additional Chinese workers will enter the country once construction begins on more projects under Duterte's infrastructure plan. China is sponsoring dams, roads and railways. "The government has even started conditioning the minds of the people," he said. "They are saying that we lacked enough manpower."

Chinese construction workers in Manila: Some believe Duterte's China-backed infrastructure projects will bring more outside labor into the country. (Photo by Kimberly dela Cruz)

Duterte last month said infrastructure projects were delayed partly because many skilled workers "are no longer here in the Philippines but have gone to the Middle East," a top destination for Filipino construction workers.

Meanwhile, a 33-year old Chinese worker at a telecom company in Manila appealed for understanding.

"The Chinese and Philippine governments have a good relationship right now, and they have a lot of cooperation, so many Chinese want to do business here," he said. "The legal workers increase, and so do the illegals."

"I believe Chinese people want to work here legally but they don't know the process, maybe because of the language [barrier]."

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