For a moment last week, Philippine President Rodrigo Duterte seemed to have orchestrated one of the most dramatic geopolitical shifts in Asia since the end of the Cold War — abandoning the US, his country’s longtime ally, for rival China. Characteristically, he did so with zero subtlety. In responding, the US should avoid making the same mistake.

He remains the Philippines’ legitimately elected leader, and at least some of his supporters hold anti-American views — stemming in part from America’s history as a colonial overlord. Whatever Duterte meant — he now says he was talking only about striking a more independent line in foreign policy — there’s every reason to believe ties with the U.S. will cool in the near term. Meanwhile, China has promised Duterte billions in soft loans and potential infrastructure investments.

“Renewed ties between Manila and Beijing will bring a huge impact on many small businesses in the country, presidential consultant for entrepreneurship Joey Concepcion and Philippine Chamber of Commerce and Industry” president George Barcelon said.

“Improved relations with China is expected to boost tourism in the Philippines,” said Concepcion and Barcelon, who were part of President Rodrigo Duterte’s delegation during his state visit in China.

Duterte is winding down a four-day state visit to China where $13 billion in trade deals are set to be signed as he repairs diplomatic ties that have been strained by disputes in the South China Sea.

“It’s very positive with all those deals coming in. I think the market will see a resurgence again. There will still be some volatility but it’s looking positive for the economy and the stocks,” BDO Capital President Eduardo Francisco told ANC’s “Market Edge with Cathy Yang.”

[WASHINGTON] “US Secretary of State John Kerry spoke to his Philippines counterpart over the weekend, emphasising strong and stable ties between the allies after comments by the Philippines president raised questions about bilateral relations,” the State Department said on Monday.

State Department spokesman John Kirby said “Mr Kerry expressed concern about the tone of remarks by Philippines President Rodrigo Duterte, who has sharply criticised President Barack Obama and talked about a separation from the United States.”

Mr Kirby said the phone call on Sunday led Mr Kerry to feel the United States and the Philippines “can work through this”.

He said Washington has seen no practical action by Manila to move away from ties with the United States.

 

For more in depth news visit:

http://www.bworldonline.com/content.php?section=Beyond&title=the-us-can-still-be-friends-with-the-philippines&id=135325

http://news.abs-cbn.com/business/10/24/16/renewed-ph-china-ties-expected-to-boost-tourism-agriculture-smes

http://news.abs-cbn.com/business/10/21/16/dutertes-china-shift-positive-for-economy-bdo-capital

http://www.businesstimes.com.sg/government-economy/kerry-speaks-to-philippines-counterpart-after-separation-comment-by-duterte

The Chinese government said on Wednesday that Philippine President Rodrigo Duterte will visit China from October 18 to 21.

But even before the visit was confirmed, business leaders and executives in the Philippines were clamoring to take part in Duterte’s trip to one of the world’s biggest economies.

Who will be part of the delegation has not been announced, but on October 11 Reuters reportedthat business groups and government officials said registration for the trip had been “oversubscribed.”

The number of Philippine entrepreneurs to travel with Duterte swelled from about two dozen to about 250, according to Trade Undersecretary Nora Terrado, as they look to discuss potential deals in the rail, construction, tourism, agribusiness, power, and manufacturing sectors.

“I understand there are 100 more wanting to go,” Terrado told Reuters, adding that the size of the delegation was unusual because the two countries agreed on the visit only about a month ago.

The eagerness to do business with China comes amid an apparent thaw in previously frosty relations between Manila and Beijing, ties that had been strained over China’s assertive territorial claims in the South China Sea, which the Philippines and several other neighbouring countries have rebuffed.

Duterte has not capitalised on a July 12 international-court ruling that dismissed China’s expansive claims. The current Philippine president said in April, prior to his election, that he would be willing to “shut up” about disputes in the sea if China provided aid.

Since Duterte took office in June, he has kept his conciliatory stance toward China, particularly on economic and political matters — a position that appears to have been enabled by China’s more measured approach to issues in the South China Sea.

More recently, business dealings between the two countries appear to be heating up.

On Saturday, Philippine Finance Minister Carlos Dominguez said that Duterte would seek billions of dollars in infrastructure investments from China over the coming months (which Chinese firms are open to providing). The following day, Philippine Agriculture Secretary Emmanuel Pinol said China would lift a ban on fruit exports from 27 Philippine firms as a “gift” to Duterte.

“We are neighbours … this is actually what the president is thinking: instead of fighting, why don’t we just become friends?” said Francis Chua, chairman emeritus of the Philippine Chamber of Commerce and Industry, according to Reuters.

“The clouds are fading away. The sun is rising over the horizon, and will shine beautifully on the new chapter of bilateral relations,” Zhao Jianhua, the Chinese ambassador to the Philippines,said in September.

‘One cannot replace the other’

Despite the apparent enthusiasm among Filipino executives about the potential to work with the Chinese, there are reasons to worry about the footing of the Philippine economy.

Since taking office, Duterte has egged on a anti-narcotics campaign that has driven up homicides in the country. Since June, nearly 4,000 people have been killed — the majority of them by unknown assailants it what are likely vigilante killings. He has also accused public figures of criminal activity with scant evidence, stirring fears among the business community.

Duterte has also railed against the US, raising concerns about the health of Manila and Washington’s longstanding relationship.

“Many investors have been turned off by threatening remarks made by Duterte against the US and China, casting doubt on the future of Manila’s foreign policies and his handling of the economy,” CNBC reported at the end of September.

“A lot of people are hesitant to put their money into the Philippines at this point,” Guenter Taus, who heads the European Chamber of Commerce in the Philippines, told The Economist in September.

Duterte has remained broadly popular through the first three months of his term, but that behaviour has put him at odds with much of the rest of the world.

And a trip to Beijing is unlikely to sooth the frayed nerves the Philippine business community.

“There is still significant concern among businesses about the potential of Duterte’s policies, both domestic and international, to cause instability and upset the economic growth” of theBenigno Aquino administration, which ran from 2010 to 2016, said Gregory Poling, the director of the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies.

Given the size of the Chinese economy, expanded business dealings with Beijing only make sense for Philippine businesses, but deeper relationships with China’s businesses can’t take the place of Manila’s extensive economic ties to the US and other countries.

“They are going on the trip with him because there is no reason to pass up potential opportunities in China,” Poling told Business Insider, “but given that China lags well behind the US, Japan, and European nations on the list of investors in the Philippines, one cannot replace the other.”

 

As seen on Business Insider Australia by Christopher Woody

The World Bank has retained its three-year economic growth forecasts for the Philippines, but stressed these projections can be exceeded if the government can ramp up its infrastructure spending as planned and provide clarity on its economic policies.

The rate of the country’s economic growth may exceed forecasts in the next two years as long as the government could further ramp up public spending as planned by the Duterte administration, said the World Bank. “The Philippines remains one of fastest growing economies in East Asia and the Pacific despite the weak global economy.”

Upon assuming office, the Duterte government reassured investors and the private sector with continuity of existing macroeconomic policies including fiscal, monetary and trade policies that would support continued economic expansion and poverty reduction.

Domestic demand will power the Philippine economy to one of the fastest growth rates in Asia, even as external factors and President Rodrigo Duterte’s tough talk aided an outflow of foreign funds from the equities market, an economist said Tuesday.

“At the moment, the Philippines is the best performing country in Asia. It is still extremely dynamic,” he said, adding, “The outlook looks very favorable.” Rajic Biswas, Asia Pacific chief economist at IHS.

In its October update on the domestic economy titled “Outperforming the Region and Managing the Transition,” the World Bank said the country has weathered the challenging global economy and grown at a rapid pace over the past five years, “supported by strong macroeconomic fundamentals and a highly competitive workforce.”

In a briefing, World Bank lead economist Birgit Hansl said the completion of the 2017-2022 medium term development plan for the country is expected to provide investors with direction.

Hansl said that while the country’s macroeconomic fundamentals remain strong, the government should also pay attention to microeconomic reforms such as improving the ease of doing business in the Philippines to sustain growth.

 

Sources:

PH Could Surpass Growth Forecast
Economy Seen Sustaining Growth on Domestic Demand
World Bank Keeps Philippine Growth Forecast