The Philippines’ China Pivot: Yield and Risks

19 Pages Posted: 11 Dec 2018

See all articles by Ronald U. Mendoza

Ronald U. Mendoza

Ateneo De Manila University - Ateneo School of Government

Miann Banaag

Ateneo de Manila University - Ateneo School of Government

Jerome Patrick Cruz

Department of Economics, Ateneo de Manila University; Ateneo de Manila University

Irwin Kendrick Uy

Ateneo School of Government

Multiple version iconThere are 2 versions of this paper

Date Written: November 19, 2018

Abstract

Since the beginning of the administration of President Rodrigo Duterte, significant changes have been made to the Philippines’ foreign policy regime. Ties with the Peoples’ Republic of China have strengthened, while traditional allies like the USA and European Union have been antagonized. On a similar note Duterte has also allowed the operation of the Philippine Offshore Gaming Operators (POGOs), where various sources suggest that the majority of Chinese nationals now in the Philippines are presently employed.

This analysis aims to provide a general assessment of the economic yield as well as the risks that has resulted from this foreign policy pivot of the Philippines. On one hand, increasing ties with China has resulted in an influx of tourism, investment, and infrastructure financing flows. For instance, based on the NEDA approved projects, China has been granted 12 infrastructure projects, the most awarded to other countries in 2018. However, negative effects have also been evident. In particular, the rising number of Chinese nationals - both legal and illegal - in the country has also raised concerns regarding our national security, both due to their disproportionate impacts on local property markets, and the potential dearth of employment benefits being extended to Filipinos. The balance of these emergent risks and benefits from the China rapprochement raises important questions on the sustainability of the gains from increasing ties with China, and underscore the need for continued monitoring through a combine economic and national security lens.

Keywords: China, Philippines, Philippine Offshore Gambling Operators, Philippine Real Estate

JEL Classification: F1, F22, F52

Suggested Citation

Mendoza, Ronald U. and Banaag, Miann and Cruz, Jerome Patrick and Uy, Irwin Kendrick, The Philippines’ China Pivot: Yield and Risks (November 19, 2018). Available at SSRN: https://ssrn.com/abstract=3286851 or http://dx.doi.org/10.2139/ssrn.3286851

Ronald U. Mendoza (Contact Author)

Ateneo De Manila University - Ateneo School of Government ( email )

Katipunan Road
Loyola Heights
Quezon City, 1108
Philippines

Miann Banaag

Ateneo de Manila University - Ateneo School of Government ( email )

Pacifico Ortiz Hall, Fr. Arrupe Road
Social Development Complex, Loyola Heights
Quezon City, Manila 1108
Philippines

Jerome Patrick Cruz

Department of Economics, Ateneo de Manila University ( email )

P.O. Box 154
Manila
Philippines

Ateneo de Manila University ( email )

P.O. Box 154
Manila
Philippines

Irwin Kendrick Uy

Ateneo School of Government ( email )

Pacifico Ortiz Hall, Fr. Arrupe Road
Social Development Complex, Loyola Heights
Quezon City, Manila 1108
Philippines
09178451522 (Phone)

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