MANILA: Teeming with marine life, the waters of Scarborough Shoal are a haven for valuable fish, such as yellowfin tuna, grouper and red snapper.
A fishing expedition there can earn fisherman Federico Josol three times more money than fishing in the waters of his hometown Masinloc, the closest point in the Philippines to the shoal.
But every trip to the shoal, located about 225 kilometres off the Philippine coast, carries a risk. And recently, he had a bruising encounter with the Chinese Coast Guard.
“They said it was their territory. We got scared because they had guns. They were ramming into our boats and forcing us to leave,” he recalls. “It’s nothing but bullying.”
The Philippines and China have been locked in a long-simmering sovereignty dispute over the shoal, where Chinese Coast Guard vessels regularly intimidate and drive off Filipino fishermen.
In 2016, an arbitral tribunal in The Hague dismissed China’s claim to the shoal, but Beijing rejected the ruling.
The tension in the South China Sea has contributed to the rise of anti-China sentiments in the Philippines, but critics say President Rodrigo Duterte has downplayed the issue and done little to get China to respect his country’s maritime rights.
Since coming to power in 2016, he has pivoted away from the United States and warmed to China in exchange for billions of dollars in pledged Chinese aid, loans and investments in infrastructure.
But four years on, much of Beijing’s promised investments have not materialised. Amid the growing concern, the programme Insight explores whether the concessions made to China, in the maritime dispute and more, may have been for naught.
WATCH: Will Duterte's pro-China policies pay off for Philippines? (46:25)
The centrepiece of the Duterte administration’s economic policies is the “Build, Build, Build” (BBB) programme, which consists of some 20,000 infrastructure projects including airports, seaports and highways.
With China’s funding touted as the best option for upgrading the country’s infrastructure, the Philippines was set to usher in a “golden age of infrastructure”.
But less than five per cent of China’s promised US$24 billion (S$32 billion) in loans and investments have come to fruition. “They’re taking Duterte for a ride,” says political analyst and author Richard Heydarian.
“He’s done a lot for China, and yet what did he get from China in exchange? Up until today, there are practically zero big-ticket infrastructure projects by China.”
One such project is the Kaliwa Dam project. Seen as a solution to the water woes in Metro Manila and surrounding regions, it includes the building of three dams to serve 17.5 million people.
But the initiative has stalled, as China “is taking quite a hard negotiating line” to ensure that “these projects are commercially worthwhile”, said Peter Mumford, the Southeast and South Asia practice head at risk consultancy Eurasia Group.
The project has also been delayed by protests from environmental groups and local officials concerned that it would result in flooding and the displacement of thousands of indigenous people in the Rizal and Quezon provinces.
Daraitan village in Rizal, for example, could be at risk of being submerged with the construction of the dam — and Melody Alao, a tour guide in the area, would lose her livelihood.
“It’ll affect not only tour guides like me who depend on tourism, but also those involved in transport, canteen owners, street vendors, shops … and so on,” says Alao, whose income helps to send her 18-year-old daughter to school.
“We can’t do anything about it, except maybe appeal to the government.”
Leon Dulce, the national co-ordinator of the Kalikasan People’s Network for the Environment, thinks the environmental impact associated with the dam outweighs the potential benefits.
“(The project) is basically a Pandora’s box of various threats to the people,” he says. “This relationship between Duterte and China — it’s a very toxic relationship that results in the victimisation of the Filipino people.”
Daraitan district chairman Rodel Hinagpisan, however, is optimistic that the Duterte administration will protect the communities there.
“(The government) assured us that we won’t be submerged,” he says. “It’s for the greater good — there’s water scarcity in Metro Manila, (otherwise) the dam wouldn’t be built.”
While projects like the US$211-million Kaliwa Dam remain a priority for the Duterte administration, experts say the Chinese loans needed to finance a big portion of the BBB programme are expensive, with high interest rates.
China is also known for funding infrastructure projects in poorer countries and then demanding concessions in exchange for debt relief, a trend called “debt-trap diplomacy”.
“Profit is always the bottom line. And that’s why they (China) choose to pursue the Kaliwa Dam project,” says Dulce. “We run the risk of giving up all of these resources to China should we default on the loans.”
The Philippines should have considered other funding options, says Jay Batongbacal, the director of the University of the Philippines’ Institute for Maritime Affairs and Law of the Sea.
Loan agreements with Japan or South Korea, for example, would have complied with “requirements for social acceptability”, he argues. “(This means) the local communities would sign off on these projects as well, not just the national government.
“The Chinese loan agreement doesn’t provide for that. And so I think the intention was simply to go ahead and build these things without regard for (their) impact on the local communities.”
Japan’s loan proposal for the Kaliwa Dam, for example, entailed micro-hydro projects and rainforest restoration, cites Dulce.
International developmental projects must also comply with “safeguards against corruption” and a minimum amount of local manpower. China, however, "hasn’t been able to comply with all of these stringent requirements”, adds Batongbacal.
The Philippines’ infrastructure projects were expected to provide employment for more than 21,000 locals. But there is growing concern over the high proportion of Chinese workers in these projects.
“It’s really the Chinese companies and workers benefiting, not the Philippine people,” says Heydarian.
TIME TO RETHINK THE PIVOT?
There is also growing public resentment over the South China Sea issue. For one thing, China’s reclamation activities, mass harvesting of giant clams and overfishing are damaging the reef ecosystems in the Scarborough Shoal and the Spratly Islands.
According to Filipino marine scientists, the Philippines is losing about 33 billion pesos (S$911 million) annually from the damage in these areas, reported Inquirer.net, the news website of the Philippine Daily Inquirer.
Batongbacal also tells Insight: “China has continued to destroy Scarborough Shoal since 2012. And essentially, the (Philippine) government turned a blind eye to this in order to present this atmosphere of … congeniality with China. I think that’s become increasingly untenable.”
In recent months, divisions have formed within the Philippine government over Duterte’s China pivot, and there has been public pressure to take a tougher stance on Beijing.
For instance, citing security concerns, Philippine Navy chief Vice Admiral Giovanni Carlo Bacordo publicly opposed the relocation of a naval base to make room for a Chinese-constructed airport.
“(The base) is guarding the entrance to Manila Bay, and Manila Bay is the centre of gravity of the national government. If Manila falls, the whole country falls,” he told Inquirer.net in September.
So should Duterte change tack and rethink his China strategy? Asia Maritime Transparency Initiative director Gregory Poling thinks the president is already “responding to the fact that his China policy has abjectly failed”.
Duterte has, for example, suspended a decision to cancel the Visiting Forces Agreement, a security pact with the US.
“He needed loans, investments and aid (from China), and none of that showed up,” says Poling.
“He realises that if he keeps this up, it only makes him look weak. It damages his political brand, and it hurts his successor, whoever he decides to anoint for the 2022 presidential run.”
Batongbacal says that with Filipinos unconvinced that the pivot has produced “tangible benefits at this point”, Duterte is probably “hoping that China will provide the Philippines with free vaccines for COVID-19”.
“That’s his last card that he can play in order to salvage his China policy,” adds the professor.
Watch this episode of Insight here. The programme airs on Thursdays at 9pm.