October 21, 2016

China Winning the Aid to Philippines Auction

Duterte cosying up to the Chinese flag and, even more, loving China's cash. (Photo courtesy Kami)
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COMMENT

Duterte is unscrupulous in openly courting cash from countries to fill his coffers. This is Duterte's Aid Auction. From his visit to China Duterte stands to score US$22.5 Billion. Can the US or Japan counter with higher bids?

Duterte is talking of a visit to Putin's Russia, perhaps soon. Will Putin try to buy Duterte as well?

ARTICLE

Thee following paragraphs are excerpts from the Los Angeles Times, October 20-21, 2016 http://www.latimes.com/world/asia/la-fg-philippines-us-20161020-snap-story.html

Philippine President Rodrigo Duterte announced [October 20, 2016] that he was “separating” from the United States and embracing China as the new best friend of the Philippines.

During the visit, China and the Philippines are signing agreements for US$13.5 billion in trade deals. The Philippines also said China had committed itself to US$9 billion in low-interest loans. And the Philippines offered to open negotiations with China over disputed fishing waters in the South China Sea, a surprising change of policy given that an international tribunal in the Hague had ruled in July against China’s claim of historic rights to the waters.

[Duterte said] “I’ve realigned myself in your ideological flow and maybe I will also go to Russia to talk to Putin and tell him that there are three of us against the world — China, Philippines and Russia,’’ he said. And as an added slap, Duterte mimicked an American accent and said: “Americans are loud, sometimes rowdy. Their larynx is not adjusted to civility.’’

At least for now, Duterte made no reference to cancelling the mutual defense treaty with the United States, which dates back to 1951. The previous U.S.-friendly administration of Benigno S. Aquino III had agreed to allow the United States stepped-up access to Philippine military bases, and that agreement apparently remains in effect.

Duterte’s announcement is a blow to the Obama administration’s much-heralded “pivot” to Asia. U.S. diplomats had previously pointed to warmer relations with Manila — and tensions between China and the Philippines in the South China Sea — as evidence that the policy was succeeding.

…other countries in the region — presumably Japan and South Korea  are similarly "confused" by Duterte's outbursts and "where this is going ... what it portends." See WHOLE LA TIMES ARTICLE.

BACKGROUND: CHINESE AND US MONEY TO THE PHILIPPINES 


Following are some details of the Philippines' two main bilateral relationships [with China and the US]:

- In 2015, Philippine exports to China were $6.4 billion, to the United States $8.8 billion.

- In the same year, Philippine imports from China were $10.83 billion, from the United States $7.21 billion.

- China had provided the Philippines $115.33 million in official development loans and $5.7 million as grants as of December 2014. The United States has provided $1.15 billion in grants to the Philippines as of June 2015.

- About 250,000 Filipinos lived in China, Hong Kong and Macau as of December 2015. About 6 million Filipinos live in the United States.

- About 454,000 American tourists visited the Philippines in the first half of this year. About 400,000 visited from China, Hong Kong and Macau.

- Filipinos in the United States remitted $8 billion in 2015. The figure from Filipinos in China, Hong Kong and Macao was just over $1 billion.

- Washington has designated the Philippines, a former colony, as a major non-NATO ally. The two countries signed a mutual defense treaty in 1951. While the United States closed its bases in the Philippines in 1992, the two countries have signed a deal allowing increased U.S. military presence on a rotational basis and storage of supplies and equipment for maritime security and humanitarian missions.

- Manila will receive about $120 million in U.S. military aid this year, the largest sum since 2000 when the American military returned to the Philippines for training and exercises after an eight-year hiatus.

17 comments:

Anonymous said...

Hi Pete

In this year, PM Abe holds very important meetings with President Duterte and President Putin.

Though a series of behaviors by President Duterte is obviously pain of neck for US and Japan, Japanese government will try to make best effort to calm President Duterte and to keep good relationship with the Phillipines.

PM Abe will definitely offer the aid to the Philippines, but, there is a limit. Russia also requests Japan for many things such as building of very long undersea tunnel [1] though La Pérouse Strait [2] for extension of Trans-Siberian Railway to Tokyo [3].

[1]https://en.wikipedia.org/wiki/Sakhalin%E2%80%93Hokkaido_Tunnel
The Sakhalin–Hokkaido Tunnel (or potentially bridge) is a proposed connection to link the Russian island of Sakhalin with the Japanese island of Hokkaido. Cost estimates by Russia, in the year 2000, put the project to span the 45-kilometre (28-mile) strait at $50bn (US$ 69 billion in 2016).
[2]http://www.news.com.au/travel/world-travel/asia/transsiberian-railway-could-go-all-the-way-to-japan/news-story/402bcf12d1fac94ca0f511f7a90f5170
[3]http://www.news.com.au/travel/world-travel/asia/transsiberian-railway-could-go-all-the-way-to-japan/news-story/402bcf12d1fac94ca0f511f7a90f5170

Regards
S

Anonymous said...

The Philippines is running a trade deficit with China and for a poor country that is hardly sustainable. Near term this is compensated by a trade surplus with the US, however with the political shift, those American commercial open doors may not be as welcome as before.
Clearly this is a strategic win for China as they now do not need to worry about their left flank. I suspect and will bet that Vietnam will play a much bigger role in the US and Japan regional strategies going forward, with the helping hands of history.
KQN

Peter Coates said...

Hi KQN

Yes China may have temporarily won the aid auction.

I wonder whether there'll be growing opposition in the Phils from people with a vested political interest in maintaining ties to the US?

Here's a very interesting link on Phil-Japanese military aid ties http://nationalinterest.org/blog/the-buzz/the-one-country-rodrigo-duterte-wont-separate-anytime-soon-18132 .

Pete

Peter Coates said...

Hi S [at 22/10/16 3:58 AM]

Duterte may change strategy. After China and Russia pay Duterte in aid/soft loans he may encourage the US and Japan to also give him aid.

The Sakhalin–Hokkaido Tunnel (or bridge) project is very interesting. I wonder if Russia (with low oil revenue and sanctions against it) can afford to pay its share of the project cost, ie. half of the 2016 estimate of US$69 billion?

Regards

Pete

Anonymous said...

Hi Pete

First, I introduce partial abstract of excellent article on Dutertre visit to China, which revealed background of China attitude, winning of Dutertre and responsibility of US [1].

Second, Dutertre and Abe Summit Meeting has successfully finished just now. They have confirmed domination by law and PM Abe promised significant assistance for the Philippines.

While Japanese journalism pointed out violent language of President Dutertre, it favourably introduced the President as Japanophile, showed clear sympathy for crime or drug issues of the Philippines, and demonstrated how he was popular in the Philippines through enthusiastic welcome by Filipinos in Japan. President Dutertre’s visit to Japan will surely succeed, unless tomorrow he chews gum in front of his majesty the Emperor.

[1] http://business.nikkeibp.co.jp/atcl/opinion/15/218009/102500069/
(Is Duterute visit to China a diplomatic victory for China? NIKKEI BUISINESS, by Kaori Fukushima, Oct/26/2016)
Duterute visit to China that was determined after schedule of Japan visit had determined. China relentlessly prompted hope that the visit to China was earlier than Japan, because President Xi Jinping had to deliver results before the Sixth Plenary.

China could not get a result than expected. Although China could not change conventional remarks that the issues of the South China Sea will be settled by negotiations among the affected parties, she gave huge gifts such as 13.5 billion USD and cancelled import ban of Filipino banana and travel ban for the Philippines.

Obama administration is most responsible for worsened situation up here, because she easily allowed landfill of Spratly Islands by China. US criticizes behavior and words of President Dutertre, but, US should recognize that it is herself that let to current crisis situation.

Regards
S

Anonymous said...

Hi Pete

Last night, large and subsequent small summit meetings were held. As the contents of the more important small meeting were not disclosed, an expert on relation suggested that PM Abe could not persuade President Duterte well.

US did not help the Philippines when it needed help. US did not use force to prevent from landfilling Spratly Islands by China, and showed formal action, “Freedom Of Navigation Operation (FONOP)” after landfilling. China is quite important trade partner of US, and the Philippines are powerless small ally. That’s why President Duterte showed outburst of rage when President Obama criticized violent anti-drug campaign by President Duterte. Yesterday, President Duterte called for US troops to exit the Philippines in two years. He meant the Philippines did not need useless foreign troop.

Restoring of a rift between the Philippines and US is exected for next US government. Japan acts for US for a while.

Regards
S

Peter Coates said...

Hi S [26/10/16 11:09 PM and 27/10/16 11:03 AM]

Thanks for all your views/information about Duterte in China and Japan.

Duterte's tactics and thoughts seem to be:

1. Duterte says outrageous, contradictory and offensive things to a country or leader

2. Duterte then lets his official/politicians say "Duterte really didn't mean to talk so strongly. Duterte respects all."

3. The Duterte says outrageous, contradictory and offensive things to another country or leader

4. Duterte "sincerely respects" the country that pays him the most money in his ongoing AID AUCTION AROUND THE REGION. Russia is the next major place to visit.

5. The only American Duterte respects is "America's Duterte" ie. Donald Trump.

But Trump would classify Duterte as a "Southeast Asian MEXICAN." Therefore Duterte is second rate! :)

Regards

Pete

Peter Coates said...

BTW S

I've been busy on business in my nation's capital - so am behind on Sub Matters.

Regards

Pete

Anonymous said...

Hi Pete

The four-star commander admiral in of U.S. Pacific Fleet, Harris Admiral criticized approach of Obama administration in April of 2016 [1]. He suggested that US response worried the Philippines. His suggestion seems to partially explain anger of President of the Philippines against US counterpart.

The Philippines need more aid, it is true. Also, partial decay of Pax Americana in the South China Sea is true.

[1]http://newstarget.com/2016-04-08-pacific-fleet-commander-wants-to-confront-china-in-the-south-china-sea-but-white-house-is-balking.html (Pacific Fleet commander wants to confront China in the South China Sea but White House is balking)

(NationalSecurity.news) The four-star admiral in command of the U.S. Pacific Fleet has been arguing behind closed doors that he’s ready to confront the Chinese navy over its bullying and assertiveness in the South China Sea, but the White House has put up resistance each time, the Navy Times reported earlier this week.

<*snips*>
“Military leaders interpreted this as an order to stay silent on China’s assertive moves to control most of the South China Sea, said both defense officials, prompting concern that the paltry U.S. response may embolden the Chinese and worry U.S. allies in the region, like Japan and the Philippines, who feel bullied,” the Navy Times reported
<*snips*>

Regards
S

Peter Coates said...

Hi S

I agree. The senior US Admirals in the Pacific, have a proconsular (military governor) mentality about their greatness.

Particularly Commanders of the Seventh Fleet, Yokosaka, [1] appear to have carried on General MacArthur's Proconsular Imperium [2]. The previous Commander Seventh Fleet, Vice Adm. Robert L. Thomas Jr. (31 July 2013 – 7 September 2015)[3], seemed particularly outspoken about his right to comment on bilateral relations between Japan and Australias.

[1] http://en.wikipedia.org/wiki/United_States_Seventh_Fleet#Fleet_commanders

[2] http://en.wikipedia.org/wiki/Roman_consul#Governorship

[3] http://www.japantimes.co.jp/news/2015/01/18/national/stealth-tech-no-given-in-japanese-sub-deal/#.VMXl3v6Uen9

Americans seem unaware how their Imperial airs and graces riles Soon To Be Ex Allies. China is creeping up.

As you indicate even higher US Admirals filling (Harry Harris)[4] "PACOMs" or "CINCPACs" also lord it over allies. Many thousands of Filipinos were killed by the US Army immediately after the US took over the Spanish Empire as the new Imperial Master.

[4] http://newstarget.com/2016-04-08-pacific-fleet-commander-wants-to-confront-china-in-the-south-china-sea-but-white-house-is-balking.html

I need to do another Duterte article: "The Philippines Strikes Back Against the Empire"

Regards

Pete

Anonymous said...

Hi Pete

PM Abe seems to succeed at persuading President Duterte not to abusively criticize US [1]. “Sign from God” or “God of Dream” is still effective to persuade many Asian, which may be difficult to understand for Aussie. President Duterte can not speak that he accepted request of PM Abe. But he can accept Order of God and his people will accept his explanation.

Abusive criticism of US President considerably narrows diplomatic option of US government. If President Duterte continues to speak ill of President Obama, the Philippines would find difficulty in negotiation with the next US administration. It is time to quit dirty criticism.

[1] https://www.google.com.au/webhp?sourceid=navclient&ie=UTF-8&gws_rd=ssl#tbm=nws&q=Duterte
(Philippines Duterte: God told me to stop swearing, BBC, Oct/28/2016)
<*snips*>
"I heard a voice telling me to stop swearing or the plane will crash in mid-air, and so I promised to stop," he told reporters at the airport.
<*snips*>

Regards
S

Anonymous said...


Hi Pete

Renato Constantino [1], one of the greatest Filipino historians once described USA was a great liberator from Japanese imperialism, and that Filipinos really respected the fairness of USA [2]. Constantino asked for USA not to treat Filipino as younger brother. President Duterte asked the same thing.

[1] https://en.wikipedia.org/wiki/Renato_Constantino
[2] I forget title of the book. This book describes history of the Philippines, the Great Japanese Empire and USA.

Regards
S


Peter Coates said...

Hi S [29/10/16 12:11 AM]

Constantino probably returned to the (often leftwing intellectual Filipino) "Little Brown Brother" theme in many Works http://en.wikipedia.org/wiki/Renato_Constantino#Works.

The slang term little brown brother was used by Americans to refer to Filipinos during the period of US colonial rule over the Philippines, from 1898.

The term was coined by William Howard Taft, the first American Governor-General of the Philippines (1901–1904). Taft "assured President McKinley that 'our little brown brothers' would need 'fifty or one hundred years' of close supervision 'to develop anything resembling Anglo-Saxon political principles and skills.'

"The term was not originally intended to be derogatory, nor an ethnic slur; instead, it is a reflection of "paternalist racism"" see https://en.wikipedia.org/wiki/Little_brown_brother

Americans (and Australians) described Chinese, Koreans, Vietnamese and Japanese in much harsher racist terms through to the 1960s.

Regards

Pete

Peter Coates said...

An interesting take on what may be the "true" Filipino attitude to China http://thediplomat.com/2016/11/the-philippines-is-still-balancing-against-china-amid-dutertes-pivot/

Peter Coates said...

Another super article http://thediplomat.com/2016/11/is-the-philippines-triggering-a-duterte-effect-in-asean/

Anonymous said...

Hi Pete

In Tokyo, PM Abe seemed to succeed at persuading President Duterte not to abusively criticize US [1]. And, President suggested if US stops to criticize him, he stops to abuse US [1].

But, US actually refused his proposal by halting gun sale, and President Dutrete hit back [2]. US is rapidly losing its influence on the Philippines, and Japan is going to serve as a substitute for US. As PM Abe may maintain his position for another 5 years, he will continue to adjust relation between US and the Philippines.

[1] https://www.google.com.au/webhp?sourceid=navclient&ie=UTF-8&gws_rd=ssl#tbm=nws&q=Duterte
(Philippines Duterte: God told me to stop swearing, BBC, Oct/28/2016)

[2] http://www.businessinsider.com/r-philippines-duterte-rails-at-us-monkeys-for-halting-gun-sale-2016-11 ('Look at these monkeys': The Philippine president lashes out at the US for halting gun sale)

Regards
S

Peter Coates said...

Hi S (at 4/11/16 2:00 PM)

Thanks for the info (at http://www.businessinsider.com/r-philippines-duterte-rails-at-us-monkeys-for-halting-gun-sale-2016-11 ) on the US blocking exports of its M4 (more commonly known as M16) assault rifles to the Philippines.

It's more than a coincidence that I anticipated (maintaining US contacts helps :) this US response concerning the M4s when I wrote my:

OCTOBER 13, 2016 Submarine Matters article "Duterte visiting China October 19-21, 2016 - Philippine Arms Sources" at http://gentleseas.blogspot.com.au/2016/10/duterte-visiting-china-october-19-21.html

Readers can note in my article ( http://gentleseas.blogspot.com.au/2016/10/duterte-visiting-china-october-19-21.html ) I wrote:

"...China can sell/donate to the Armed Foreces of the Philippines (AFP) arms originally made or designed in the US, particularly infantry weapons for the Philippine military. This is for its main role of counter-insurgency (internal security). For example:

- the Philippines basic weapon, the M16 [assault] rifle (aka AR-15 and M4) is widely available on the world market outside of the US, Note "Together, numerous companies in the United States, Canada, and China have produced more than 8,000,000 [M16] rifles of all variants. Approximately 90% are still in operation."

So China could donate M16-M4s to the Philippines or the Philippines can manufacture its own M4s.

Regards

Pete