Copy Reference Abstract:Under the Belt and Road Initiative, China and the Philippines are working to eliminate the infrastructure deficit and accompanying vicious cycle of underdevelopment to make the Philippines’ Ambisyon Natin 2040 a reality.
This year marks the 45th anniversary of the establishment of China-Philippines diplomatic ties. After some ups and downs in recent years, the bilateral relationship has settled into a consistently expanding trend of intensive development. In a 2018 state visit to the Philippines, Chinese President Xi Jinping joined President Duterte in agreeing on the establishment of comprehensive strategic partnership between the two countries, perceived by many to be a sign like a rainbow after rain.
The year 2020 also brings the Belt and Road Initiative (BRI) to its 7th year. Inspired by the ancient terrestrial and maritime Silk Road, the grand international development program started in 2013 with two speeches delivered by President Xi in Kazakhstan and Indonesia respectively before blooming across 125 countries and 173 cooperation agreements and attracting involvement from 29 international organizations. The five-pronged connectivity strategy involving policy, facilities, trade, finance and people-to-people exchange has evolved into a large-scale cooperation pattern featuring six economic corridors and routes served by numerous ports in multiple countries as far away as Africa, Latin America and the South Pacific.
The Philippines, an important nexus of the 21st Century Maritime Silk Road, has seen its “Build, Build, Build” initiative naturally overlap with the BRI, synergy that has spawned noticeable accomplishments across multifaceted collaborations.
Infrastructure Deficit: Vicious Cycle of Underdevelopment
Infrastructure deficit remains a common challenge facing the developing world, with absence of well-functioning infrastructure significantly constraining the countries’ economic development. Slow economic development in turn hinders improvement of the infrastructure, creating an almost unbreakable vicious cycle. The Philippines, once an Asian tiger economy, has been trapped in this cycle. The country ranks only 24th among 41 Asia-Pacific countries in terms of the infrastructure and maintenance according to the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). Even within the ASEAN region, the Philippines, a founding member state, lags far behind previous peers Singapore, Malaysia and Thailand as well as emerging economy Vietnam. The country has seen an increase in poverty incidence rate up to 20 percent, with a ranking of only 106 out of 189 countries in the United Nations Human Development Index.
In 2016, President Duterte took office vowing to break the vicious cycle with a “Build, Build, Build” program worth US$180 billion aiming to close the infrastructure gap by building railways, roads, airports and dams across the country. He also introduced Ambisyon Natin 2040, a blueprint for a bright, secure and comfortable future for the nation in which all Filipino people are lifted out of poverty and secured access to quality education, housing and public health.
In fact, the goals and agenda proposed by President Duterte align perfectly with the BRI. A World Bank study suggested that the BRI infrastructure projects would increase international trade between participants by 4.1 percent and raise the GDP of East Asia and Pacific developing countries by 2.6 percent to 3.9 percent. In 2018, China and the Philippines officially reached an agreement on 10 years of infrastructure cooperation covering agriculture, transportation, irrigation, information and communication technologies.
Timely Infrastructure Cooperation
In early 2020, President Duterte reaffirmed the necessity of Kaliwa dam project, calling it the “last resort” to supply water to Manila. The project, contracted to China Energy Engineering Group, is indeed an overarching component of the Philippines’ New Centennial Water Source aiming to build a 570-million-cubic-meter reservoir to supply a daily 600 million liters of water to Metro Manila. Considering the serious water shortage in Metro Manila, the project is expected to raise living conditions markedly.
The Chinese saying “if you seek wealth, start by building roads” captures the essence of every BRI project. Physical connectivity is always the priority of the BRI.
Mindoro, the Philippines’ seventh largest island and an underdeveloped region, was once an important nexus of the ancient Maritime Silk Road. From 2003 to 2017, China Geo-engineering Corporation was contracted to build Western Coast Road and Bridge Project’s 6th, 4th and 3rd sections, which opened a lifeline for local economic development and greatly improved local transport conditions. Most importantly, it brought tangible benefits to local people by cutting commuting times drastically.
Chinese firms are also contractors of three massive rail projects in the Philippines—Philippine National Railways South Long-Haul Project, Subic-Clark Railway and Mindanao Railway. Other major projects built by Chinese companies include a power supply project in Mindanao and a light rail project in Manila.
Chinese enterprises attach importance to environmental protection in all foreign projects, seriously controlling contamination while assisting local governments with environmental governance. In September 2019, China Energy Engineering Group introduced advanced technology at a coal-fired power plant in Barangay Nipa that effectively reduced pollution to well below Philippines limits and even lower than the international standards. The project was applauded by President Duterte himself. Another three waste incineration power plants built by the same contractor in three Philippine cities also brought effective and environmentally friendly methods of disposing of waste that generate 720,000 kilowatt-hours per day, saving US$130,000 daily over burning coal.
Positive Spillover
Leveraging China’s experience playing economic catch-up during its transformation from a poor and underdeveloped country to the world’s second largest economy and largest trading nation today, the BRI offers a development formula tailored to lagging countries by providing options for introducing industrial parks, bridges, ports and roads to promote industrial agglomeration and fuel industrial upgrading. Numerous development economics studies show that infrastructure construction is usually the primary driving force for developing countries being able to catch up, which eventually spills over to public health, education, poverty alleviation and countless other sectors.
The past few years have seen consistent efforts and noticeable accomplishments in infrastructure cooperation between China and the Philippines, highlighted by several flagship projects in agriculture, irrigation, water supply and flood control. Chinese contractors fulfilled social responsibility while bringing tangible benefits to locals through improved living conditions. Most importantly, all projects effectively diminish the infrastructure deficit accumulated in the Philippines and inject great impetus to the countries’ economic development.
Endeavours by China and the Philippines under the BRI and “Build, Build, Build” program are expected to eliminate the infrastructure deficit and break the vicious cycle of underdevelopment to pave a path to the bright future outlined in Ambisyon Natin 2040 and a community of shared future for mankind.
About the author Hao Nan holds a Master’s Degree from the Lee Kuan Yew School of Public Policy at the National University of Singapore and serves as an Assistant Research Fellow at the Charhar Institute.
Hao Nan
On October 9, 2017, 20 million yuan (US$2.8 million) worth of machinery trucks, cement mixers, excavators and bulldozers arrive in Illigan. This batch of equipment was donated by China to aid reconstruction efforts after Marawi endured a battle against ISIL-affiliated terrorists.