China will invest $3.7 billion in 30 projects for poverty alleviation in the Philippines, the Ministry of Commerce announced after a meeting with a visiting Philippine delegation of ministers amid improved bilateral ties.
Chinese experts say China's investment and business assistance is irreplaceable for the Philippines despite competition from other countries that offer aid to the Southeast Asian nation.
A delegation of five Philippine cabinet members arrived in Beijing Sunday night for a two-day visit. Their visit is aimed at materializing the promised $15 billion investment from China to the Philippines reached in October last year, during President Rodrigo Duterte's visit to Beijing.
After meeting with the delegation on Monday, Chinese Commerce Minister Gao Hucheng announced the poverty-reduction projects and said that China is willing to promote mutual trust with the Philippines and implement the agreement reached by both countries' leaders on economic and trade cooperation as soon as possible under the One Belt and One Road initiative.
Philippine Finance Secretary Carlos Dominguez, head of the delegation, said he had a "very productive" meeting with Gao and they had discussed large projects in the Philippine's rural areas, as well as some smaller projects, Reuters reported.
During the meeting, both countries agreed to restart the China-Philippines Joint Committee of Economics and Trade which had been suspended since 2011, China News Service reported.
"The fast recovery of the Sino-Philippine relationship is based on successful handling of the sovereignty dispute in the South China Sea between both countries," Xu Liping, a research fellow at the National Institute of International Strategy of the Chinese Academy of Social Sciences, told the Global Times.
China-Philippines trade and economic cooperation was severely affected by the island disputes in the South China Sea during former Philippine President Benigno Aquino III's administration, which stirred up disputes backed by the U.S.
His successor Rodrigo Duterte took a pragmatic approach and visited China in October, during which the two sides agreed to downplay sea tensions and signed a batch of investment and trade agreements.
Irreplaceable assistance
China's investment and business cooperation is not only a reward for Duterte's friendly policies to China, Xu said, but also for the long-term benefit of both countries.
"Duterte is not a traditional Filipino politician, because he has no base in Manila and those pro-U.S. traditional political, media and economic elites. His support is from the grass roots and undeveloped rural areas," Chu Yin, an associate professor at the University of International Relations, said.
He can win high support from poor voters who suffered from drug trafficking by countering drug dealers with a tough hand. But in order to secure long-term support under pressure from traditional elites and U.S. criticism of the anti-drug campaign, Duterte needs to deliver economic benefits and infrastructure development to the people, Chu said.
Although Japan is also offering financial assistance to the Philippines, in what the international community views as a contest with China's influence in the South China Sea region, Japan's offer to the Philippines has no comparison with China in terms of the amount of money and its effect, Chu said.
Media reported that Japanese Prime Minister Shinzo Abe pledged 1 trillion Japanese yen ($9 billion) in aid to the Philippines over five years, including building a subway line for Manila and supplying aircraft and ships for the Philippine coast guard.
Xu said, "$9 billion sounds like a big number as well, but the fact is that only 20 percent of this aid will be from the Japanese government, while Japanese private companies will share the rest. But they don't have a very high motivation to follow Abe's order."
Since the Philippines and Vietnam are fixing relations with China and restarting pragmatic cooperation which benefits both sides, it is very difficult for the U.S. to use China's neighbors to intervene in the South China Sea in the future, Chu said.
According to the Chinese commerce ministry, Dominguez said that the Philippines will fully support China's One Belt and One Road initiative, and will promote the connection between two countries' development strategy, and the Philippines sincerely hopes China can expand its investment on infrastructure construction and start financing cooperation in the Philippines.
The Philippines will take up the rotating presidency of ASEAN in 2017. Chinese Commerce Minister Guo said "China will closely cooperate with the Philippines to deepen the construction of the China-ASEAN free trade zone and push the Regional Comprehensive Economic Partnership negotiations toward constructive results as soon as possible."
