WPS, $12-B deals bagged

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President Rodrigo Duterte obtained a commitment from Chinese President Xi Jinping to “manage” the West Philippine Sea (WPS) issue through bilateral negotiations, while snaring 19 business agreements with Chinese firms which is estimated to be worth $12.165 billion in potential investments.

The business projects sealed are projected to employ 21,165 Filipinos.

Mr. Duterte and his Cabinet men are in China from 25 to 27 April for the Belt and Road Initiative forum.

In a statement, presidential spokesman Salvador Panelo said Mr. Duterte raised the WPS issue, particularly the situation on Pag-asa Island, during his bilateral meeting with Xi late Wednesday.

“Both agree that the situation can be managed by the mechanism of bilateral negotiations, but it should not affect the cooperation being undertaken by both the Philippines and China and they look forward to a productive discussion on matters of mutual concern and interests,” Panelo said.

He said Xi spoke of the importance of being good neighbors and the proper handling of differences between the countries.

Free global trade

During a high-level meeting of leaders at the second Belt and Road Forum in Beijing, Mr. Duterte said the Philippines will uphold an independent foreign policy and the principle of multilateralism.

“I reaffirm my country’s commitment to the collective vision of common prosperity through cooperation on the basis of mutual respect and as equal sovereign states,” he said in a speech.

“In pursuit of our independent foreign policy, we will uphold and defend the open and rules-based international order,” he said.

China has taken over from the United States as the defender of free trade as it pushes the agreement to connect with Africa, Europe and the rest of Asia through a series of ports, railways, roads and industrial parks under the Belt and Road Initiative, while the US turns increasingly inward under President Donald Trump.

“Multilateralism under the Belt and Road Initiative complements the Association of Southeast Asian Nations’ plan for connectivity and creates an environment that fosters bilateral relations,” Mr. Duterte said.

“We built the current rules-based order because nobody wins in a zero-sum game. This brought us sustained peace and prosperity. From building a global free trade regime to laying down the rules that govern the use of oceans, multilateralism allowed us to undertake global governance through cooperation,” he said.

President Rodrigo Roa Duterte and People’s Republic of China State Council Premier Li Keqiang pose for posterity prior to the start of the bilateral meeting at the Diaoyutai State Guest House in Beijing on April 25, 2019. SIMEON CELI JR./PRESIDENTIAL PHOTO

Mutual trust stressed

“While the Chinese leader acknowledged the inevitable of having challenges to the bilateral relations, he placed importance on the mutual trust that exists between the two nations in order to resolve the same,” Panelo said.

The Palace official said Xi cited the Memorandum of Understanding on Oil and Gas as an example, when both Manila and Beijing suspended their differences for a joint exploration that would mutually benefit both countries and their peoples.

He added that Mr. Duterte articulated to Xi his position that the Philippines remains China’s ally in Southeast Asia.

Duterte said, “Both countries are allies, and allies strengthen — and do not destroy – each other,” he added.

Energy, mftg gets priority

The Philippine business delegation and their Chinese counterparts signed one contract agreement, three cooperation agreements, two purchase framework agreements and 13 memoranda of agreement (MoA) or understanding (MoU).

Trade and Industry Secretary Ramon Lopez, who was with the delegation, reported that majority of these projects are on energy, infrastructure, food, telecommunications, sale of agricultural products, tourism, and economic zone and industrial park development.

“The Duterte administration is pushing for investments on energy and manufacturing for the Philippines to broaden its manufacturing base and increase its exports. Among the agreements are energy projects that will help the country decrease its dependence on oil and gas imports. There will also be several industrial parks to bring jobs to Filipinos in the countryside,” said Lopez.

Aside from these agreements, AAC Technologies also expressed intent to expand its current operations in the country during a courtesy call with Sec. Lopez. The company plans to invest $30 million to engage in stepper motor and motor reducer manufacturing and to create about 3,000 jobs in the next three years.

Focus on Mindanao

The contract agreement is for the proposed 250 megawatts South Pulangi Hydroelectric Power Plant Project in Damulog, Bukidnon. The project, to be developed by Pulangi Hydro Power Corp and China Energy Co. Ltd, aims to improve power supply reliability and resilience in the country, particularly in Mindanao. It is valued at $800 million and will create 5,000 jobs.

Filipino conglomerate Tranzen Group entered a framework agreement with China Power Investment Holding for thermal, hydro, and renewable power plants, cumulatively valued at around $1.5 billion to $2 billion and is expected to create 1,000 jobs.

The Davao Occidental local government and Fengyuan Holdings signed an MoU for a $1.5 billion petrochemical refinery processing plant complex to be located at the Tubalan Cove Business and Industrial Park. The project is estimated to need 500 workers.

As part of the long-term plan to reduce dependence on imported energy fuels, the Department of Energy, Shanghai Electric Group Co. Ltd, and Deluxe Family Co. Ltd. inked a $40 million MoU to collaborate in the promotion of the use of indigenous, new and renewable energy resources.

Diverse projects

Tranzen likewise signed two MoU for infrastructure and telecommunications projects. One was with China Harbour Engineering Company Ltd. for construction of the Light Rail Transit in Manila, housing, and roads in North Luzon. These projects have a combined value of $4 billion and are expected to generate 1,000 jobs.

The other was with CITIC Guoan Information Technology for a $500 million project to construct infrastructure for nationwide Wi-Fi Internet connectivity in various capital cities and towns in the Philippines, which is expected to create 1,000 jobs.

Two Philippine companies also signed purchase framework agreements to supply agricultural products to Chinese companies. Philpack Corp. will supply $40 million-worth of pineapples to Chinese company Goodfarmer Foods Holding Group, while Eng Seng Food Products will supply $36.5 million-worth of green coconuts to China Artex Corp. The latter is expected to produce 1,500 jobs.

The Cagayan Economic Zone Authority (CEZA) signed six MoU with Chinese firms to develop the economic zone. Projects include a $150 million yacht club, a $500 million green textile industry park, a $500 million expansion of the Cagayan North International Airport, a $100 million fintech hub and financial center, a $500 million smart city, and $150 million for various projects, including a resort and theme park and lithium battery manufacturing plant.

The Pampanga local government and Chinese firm Macrolink Group likewise inked a $1.5 billion framework agreement to construct and develop the Yatai Industrial Park, estimated to create 10,000 jobs.

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