Part of the agenda of Pres. Aquino’s trip to the US and United Kingdom was to shore up support to the South China Sea territorial disputes. However, research group IBON said that the government’s increasingly antagonistic stance on the issue shows its bias for relations with the US and EU over economic diplomacy with China.
A more prudent approach would result in greater gains considering that China is the Philippines’ biggest export market, third biggest investor, third largest official aid provider and tenth largest source of overseas remittances, IBON said.
The Philippine government has unnecessarily raised tensions over the undecided territorial boundaries by bringing in the US and militarizing the situation. Since late last year it has invoked the Cold War-era Mutual Defense Treaty with the US, sought statements of support from the US which is in the middle of increasing its military presence in the region, brandished vintage military hardware from the US, and invited subtle force projection by the US through large-scale military exercises and ship visits.
This has already prompted a low-impact reaction from China of limiting Chinese tourists to the Philippines and refusing Filipino banana exports for supposedly phyto-sanitary reasons. Bananas only accounted for 1.2% of Philippine exports to China in 2011 compared to electronics/electricals (56.9%) and minerals (15.2%).
However total exports to China, including Hongkong, in 2011 amounted to US$9.8 trillion which was more than to Japan (US$8.9 trillion), US (US$7.1 trillion), European Union (US$6 trillion) and Singapore (US$4.3 trillion). It also invested US$99.4 million last year after Japan (US$355.2 million) and the US (US$225.0 million). The US$390.4 million in remittances last year was also the third largest from Asia – after Singapore and Japan – and the eighth largest worldwide.
As of 2010, China’s net loan commitment to the Philippines of US$1.1 billion was smaller only than from Japan (US$3.5 billion) and the World Bank (US$2 billion) and was even larger than from the Asian Development Bank (US$978.5 billion) which recently held its Board of Governors meeting in Manila.
But more important is that government’s stance unnecessarily preempts deeper partnerships where the Philippines may gain insight from China's domestic industrial development in which strong state intervention remains an essential element, said IBON. (end)