Philippines’ Duterte signals closer ties with China

Leaders of China and the Philippines have preliminarily agreed to cooperate on oil and gas exploration, a move that has angered many Filipinos wary of Chinese territorial expansionism in the region.

Experts said the agreement is likely to be more symbolic than a concrete commitment to exploration in the disputed waters.

Philippine President Rodrigo Duterte and his Chinese counterpart, Xi Jinping, announced 29 agreements between the two countries on Tuesday in Manila, at the beginning of a two-day state visit by the Chinese leader.

The deals include a memorandum of understanding to jointly explore for energy resources, alongside agreements on basic education, agricultural cooperatives and infrastructure projects, Philippines government spokesman JV Arcena told CNN.

According to a Chinese draft of the deal, the Chinese side would authorize its state-owned China National Offshore Oil Corporation to undertake joint exploration in “relevant sea areas” of the South China Sea with an as-yet unnamed Filipino entity, CNN Philippines reported. Filipino opposition senator Antonio Trillanes released the draft Tuesday to reporters.

Beijing claims an enormous swathe of territory in the highly contested sea, overlapping competing claims from the Philippines, Vietnam, Brunei and Malaysia, among others.

The Philippines in the past has taken a strong line on China’s behavior in the area, even taking China to an international tribunal. But under Duterte, the government has increasingly looked to build an economically beneficial relationship with Beijing.

Duterte told reporters in November that China was “already in possession” of the sea. “It’s now in their hands. So why do we have to create frictions (and undertake) strong military activity that will prompt response from China?” he said.

Trillanes and another senator, Francis “Kiko” Pangilinan, filed a resolution ahead of Xi’s arrival “demanding transparency” and urging to see the final draft agreement before it is signed, CNN Philippines reported.

A ‘maritime Trojan Horse’

If the deal signed is anything like the leaked draft, it demonstrates “an agreement to maybe negotiate an agreement at some point in the future,” said Gregory B. Poling, director of the Asia Maritime Transparency Initiative.

What the deal does do, Poling added, is buy Duterte some time in which the administration can put the issue on the “back burner,” especially given that public opinion is strongly against the softer approach to the South China Sea.

An independent poll conducted in September found 84% of Filipinos oppose the Duterte administration’s inaction in the face of China’s intrusion in the waters claimed by the Philippines.

“Politically, I think what Duterte is doing is making it the next guy’s problem,” Poling added. “The deal isn’t going to lead to development. There is no provision that would actually allow them to pull oil and gas up from the South China Sea.”

For Duterte, analysts said, the agreement is much more about the appearance of striking a bargain, one that could potentially bring economic benefits to the Philippines.

“He doesn’t really care all that much about the South China Sea, what he wants is demonstrable economic benefits in terms of investment and loans,” said Euan Graham, executive director of La Trobe Asia.

China would be more interested in claims of sovereignty in the disputed waters and less so in any future energy resources that could possibly come from such a deal than the Philippines, which has a rapidly growing, energy-hungry population.

“This is a drop in ocean for (China’s) energy needs,” Graham said. “This is not about energy for China, it’s about long term control over the South China Sea.”

If Chinese rigs and state owned energy companies ever did conduct joint explorations in Philippine waters, it would be tantamount to “inviting the maritime version of the Trojan Horse,” Graham said.

“There’s simply no prospect that this would be regarded purely as a commercial deal. They are instruments of the state and the state’s and long term objective is to reinforce its sovereignty claims,” Graham said.

Protesting muscular regional policies

Thousands of Filipinos protested in front of the Chinese embassy in the business district of Makati on Tuesday, as Xi touched down in Manila.

Demonstrators voiced opposition to the construction of Chinese maritime military bases in international waters in the South China Sea, as well as onerous loan deals to finance Chinese-led projects under Xi’s ambitious, global “one belt, one road” infrastructure scheme, CNN Philippines reported.

US Vice President Mike Pence this month knocked China for loans to developing countries in the Pacific and beyond.

“The terms of those loans are often opaque at best,” Pence said at the annual Asia-Pacific Economic Cooperation, or APEC, conference in Papua New Guinea. “Projects they support are often unsustainable and of poor quality” and “lead to staggering debt,” he added.

Funding for 34 of 75 flagship infrastructure projects to be built in the Philippines will come from China, CNN Philippines reports.

Philippines’ Budget Secretary Benjamin Diokno had earlier insisted that the country wouldn’t fall into a debt trap through Beijing-assisted loans.

The “Department of Finance and other agencies … have reviewed the terms that would be the best for us. (We would not agree) if those are unreasonable terms and terms that are worse than other sources,” he said.

Meantime online, many Filipinos changed their profile pictures to images of the cartoon bear Winnie the Pooh, a symbol censored on Chinese social media for its supposed likeness to the Chinese leader.

US flexes muscle in the South China Sea

The United States has steadily ratcheted up its military presence this year in the South China Sea, leading to heightened tensions with Beijing.

To bolster its position, Beijing since 2015 has been constructing and militarizing artificial islands on reefs and shoals in the South China Sea.

On Monday, two US B-52 bombers flew near contested islands in the waters, according to US Pacific Air Forces.

While the US routinely flies bombers in the vicinity of the South China Sea as part of its long standing “Continuous Bomber Presence” missions, Beijing is particularly sensitive about the presence of US military forces near areas where the Chinese government has built islands and established military facilities on disputed maritime features.

In September, a Chinese warship came within 45 yards of the destroyer USS Decatur, forcing the US vessel to maneuver to avoid a collision, and the US Navy labeled China’s actions “unsafe and unprofessional.”

Pence and Xi spar at major meeting

Xi’s visit to the Philippines capped off an unexpectedly turbulent trip for the Chinese leader, after he joined in a war of words with Pence at the APEC summit in Papua New Guinea.

Divisions rapidly developed over language in the joint communique condemning “unfair trade practices,” which Chinese officials felt was directed at Beijing.

The heated disagreement meant no statement was issued at the end of the meeting for the first time in its 25-year history.

It was a disappointing end to the summit for Xi, who had expected to dominate due to Trump’s absence and the large loans Beijing has dispensed across the Asia-Pacific region.