Accumulation at the Margins? Mineral Brokerage and Chinese Investments in Philippine Mining

Abstract

Introduction The chapter examines how previous historical migrations, which resulted in diverse Filipino-Chinese communities, facilitated the dynamics and articulations of the People's Republic of China's (PRC) foreign direct investment (FDI) in the Philippine mining sector. In the early 2000s, Gloria Macapagal-Arroyo (2001–2010) set aside the Philippines’ territorial claims in the South China Sea in order to strengthen bilateral ties, culminating in more than 20 major investments from Chinese state-oriented enterprises (SOEs) and an increase in smaller private investments across a wide variety of sectors in the Philippines. Private Chinese investors began forming mining companies with Filipino partners in order to take advantage of the Philippines’ emerging mineral economy. However, Benigno Aquino III's (2010–2016) stand on the South China Sea led to the deterioration of Philippine–China relations, reversing the previous administrative policy of encouraging Chinese investments. Ironically, his term experienced an upturn in activities from numerous Chinese-funded artisanal andsmall-scale mining (ASM) firms, which was paradoxical because national political rhetoric and state preference were discursively against Chinese capital. Despite this, Philippine media and civil society organizations reported the rise of illegal ASM funded by Chinese investors. From the perspective of officials in the Aquino administration, the unsanctioned Chinese mineral extraction was part of China's imperial activities in the South China Sea, one with foundations in the unquenched yearning for South East Asia's strategic resources and juridically sanctioned territories. Indeed, Walden Bello, a former congressman during Aquino's term, said that he ‘received reports of the rise of illegal Chinese mining activities during Aquino, which was an irony because the increasing international conflict [between the Philippines and China]’. What accounts for the rise of Chinese ASM during the Aquino administration? I present two interrelated but distinct points on the Philippine mining sector and Chinese FDI from a political economy approach in concert with ethnographic research on three Chinese mining companies in one Philippine province. First, I examine the successive eras of state authoritarianism (1965–1985) and neoliberalism (1986-onwards) to explain the emergence of ASM in the Philippines. I show how the historical evolution of the Philippine and Chinese economies led to a confluence of factors that resulted in the proliferation of Chinese-funded ASM mining. The crisis of the Philippine mining economy and the neoliberal transition institutionalized the position of regional–local elites to greatly manage the mining sector.