The Philippines’ China Pivot: Yield and Risks

Abstract

Since the beginning of the administration of President Rodrigo Duterte, significant changes have been made to the Philippines’ foreign policy regime. Ties with the Peoples’ Republic of China have strengthened, while traditional allies like the USA and European Union have been antagonized. On a similar note Duterte has also allowed the operation of the Philippine Offshore Gaming Operators (POGOs), where various sources suggest that the majority of Chinese nationals now in the Philippines are presently employed. This analysis aims to provide a general assessment of the economic yield as well as the risks that has resulted from this foreign policy pivot of the Philippines. On one hand, increasing ties with China has resulted in an influx of tourism, investment, and infrastructure financing flows. For instance, based on the NEDA approved projects, China has been granted 12 infrastructure projects, the most awarded to other countries in 2018. However, negative effects have also been evident. In particular, the rising number of Chinese nationals - both legal and illegal - in the country has also raised concerns regarding our national security, both due to their disproportionate impacts on local property markets, and the potential dearth of employment benefits being extended to Filipinos. The balance of these emergent risks and benefits from the China rapprochement raises important questions on the sustainability of the gains from increasing ties with China, and underscore the need for continued monitoring through a combine economic and national security lens.