US destroyer sails close to contested islands in S. China Sea: Pentagon

A US destroyer sailed close to a cluster of islands claimed by Beijing in the South China Sea on Friday, the Pentagon said, amid continued tensions in the contested waterway.

The USS Decatur passed close to the Paracel Islands and "conducted this transit in a routine, lawful manner without ship escorts and without incident," Pentagon spokesman Commander Gary Ross said.

"This operation demonstrated that coastal States may not unlawfully restrict the navigation rights, freedoms, and lawful uses of the sea that the United States and all states are entitled to exercise under international law."

The maneuver is the third South China Sea "freedom of navigation" operation conducted this year by the United States, which has repeatedly stressed it will ignore China's "excessive" maritime claims.

Ross said the Decatur did not sail within 12 nautical miles of the islands, but crossed through a broader swath of ocean claimed by China.

Friday's operation was the first since a July ruling by a tribunal at the Permanent Court of Arbitration in The Hague, which ruled there was no legal basis to China's claims to nearly all of the sea -- a verdict Beijing dismissed vehemently.

China that month held a week of military drills around the Paracels in the northern part of the South China Sea, during which other ships were prohibited from entering the waters.

Several other nations across the region including the Philippines and Vietnam have rival claims to various parts of the South China Sea.

China has been accused of doing massive environmental damage to the sea by building artificial islands, some with airstrips, capable of hosting military facilities.

The issue is a source of ongoing tension and anger in the region, and Friday's US operation is likely to further inflame Beijing's ire.

source:  Yahoo!

China, Philippines agree to dialogue over Sea disputes

BEIJING: Beijing and Manila will resume talks on their South China Sea disputes, both sides said Friday, an apparent diplomatic victory for China after an international tribunal dismissed its claims to the waters.

The announcement came during Philippine President Rodrigo Duterte’s visit to China where he sought economic support from the Asian giant and announced his “separation” from longtime ally the US.

“A bilateral consultation mechanism can be useful, which will meet regularly on current and other issues of concern to either side on the South China Sea,” the countries said in a joint statement.

The move to hold talks, suspended several years ago, will please Beijing, which has a longstanding policy of insisting territorial disputes be discussed directly between the parties, in an environment where analysts say it has more clout due to its economic size, rather than in multilateral forums.

The joint statement made no reference to a ruling by a tribunal at the Permanent Court of Arbitration (PCA) in The Hague earlier this year, which ruled that there was no legal basis to China’s claims to nearly all of the sea—a verdict Beijing dismissed vehemently.

Duterte initially told reporters he would raise the ruling in China, but later said that doing so would be rude to his hosts and that territorial disputes would take a “backseat” as he heaped praise on Beijing.

“Both sides affirm that contentious issues are not the sum total of the Philippines-China bilateral relationship,” the joint statement added.

It confirmed that China would lift a ban on imports from Philippine banana and pineapple growers which it imposed in 2012 as maritime tensions mounted.

China seized control of Scarborough Shoal, a fishing ground in the Philippines’ exclusive economic zone, the same year.

The two countries agreed to step up defense exchanges and co-operation between their coastguards, though no details were given. Chinese President Xi Jinping will visit the Philippines at an unspecified time, it added.

Beijing greeted Duterte with military honors and offered the Philippines $9 billion in soft loans for development projects. It has also pledged to support his controversial war on drugs which has seen thousands killed.AFP

PH, China ink coast guard deal, 12 others

BEIJING: President Rodrigo Duterte and his Chinese counterpart Xi Jinping witnessed the signing of a maritime cooperation agreement and 12 other deals, pledging to enhance trust and deepen cooperation Thursday as Manila seeks to rebalance its foreign policy away from the US.

China welcomed Duterte – who donned a suit and tie for the occasion – with an official ceremony outside the Great Hall of the People on Tiananmen Square, with the two leaders striding side-by-side down the red carpet inspecting an honor guard, with children cheering.

Xi called the two countries “neighbors across the sea,” the official Xinhua news agency said.

Duterte is in China for a four-day trip seen as confirming his tilt away from Washington and towards Beijing’s sphere of influence – and its deep pockets.

The two leaders held “extensive” and “amicable” official talks and oversaw the signing of bilateral cooperation documents on business, infrastructure, and agriculture, among other fields, Chinese foreign ministry spokeswoman Hua Chunying said, without giving details.

In a statement, the foreign ministry quoted Xi as telling Duterte their emotional foundation of friendly and good neighborliness was unchanged, and difficult topics of discussion “could be shelved temporarily.”
Duterte called the meeting “historic,” it added.

Maritime deal

It was unclear whether the Memorandum on Understanding (MOU) on the Establishment of a Joint Coastal Guard Committee on Maritime Cooperation would involve joint patrols in the West Philippine Sea (South China Sea), which is being contested by the two countries.

Asked whether the leaders had discussed the South China Sea, the foreign ministry’s Hua said they had a “candid and friendly exchange of views on how to resolve relevant disputes.”

Their meeting represented a “return to the right track of dialogue and consultation” she said, adding China was willing to make “relevant arrangements” to cooperate on fishery issues.

Before his trip to Beijing, Duterte said he would demand that China give back Filipinos’ fishing rights in Panatag (Scarborough) Shoal.

He later on said he would not make any “hard impositions” or ask for concessions from the Chinese during the state visit.

A UN-backed arbitration court in July ruled in favor of the Philippines on the sea dispute and declared that China’s claims to the South China Sea had no basis. Beijing refuses to recognize the ruling.

Other deals

Aside from maritime cooperation, officials from both countries signed 12 agreements on trade, investments and tourism, narcotics and others in an expanded bilateral meeting at the Great Hall.

These include MOU on Production Capacity and Investment Cooperation; Agreement on Economic and Technological Cooperation between the Government of China and the Philippines; the MOU on Strengthening Trade, Investment and Economic Cooperation; the MOU on Drafting China-Philippines Economic Cooperation Development Plans and the Tourism; the MOU Implementation Plan 2017-2022; the MOU on the Lists of Transportation and Infrastructure Cooperation Projects; the MOU on Financing Cooperation between the Export-Import Bank of China and the Bureau of the Treasury of the Philippines; the MOU on Agricultural Cooperation Action Plan 2017-2019; the Protocol on Cooperation between the Philippine Drug Enforcement Agency and the Narcotics Control Bureau of the Ministry of Public Security of China; the MOU on Supporting Conduct of Feasibility Studies for Major Projects; MOU on News Information Exchange Training and for Other Purposes; and the MOU on Cooperation on Animal and Plant Inspection and Quarantine.

‘No joint exploration’

Duterte earlier thumbed down the possibility of joint exploration between Manila and Beijing in the disputed West Philippine Sea.

In a press conference in Beijing Wednesday, the President ruled out discussions with Chinese President Xi on energy exploration.

“No, I do not think that would be right,” Duterte said, adding that the proposal for joint exploration should have the consent of Congress and the people.

“If you plan to give up something, if you plan to share what you have, if it is really yours, then you cannot talk about it only on your own. This has to be with the consent of Congress and everybody, every Filipino involved,” he said.

“So at this time, I am not empowered to do that,” the President added.

source:  Manila Times

Maritime cooperation among landmark PHL-China agreements

THE impending memorandum of understanding (MoU) between the Philippines and China for a joint committee on maritime cooperation is a potentially useful tool to ensure stability in the disputed South China Sea, but judgment would be better suspended in the absence of its full text.

This is according to Mr. Steven Rood, country representative for the Philippines and Pacific Island Nations of The Asia Foundation, whose comment was sought for this story, amid a joint statement by the Philippines and China released by the Philippines’ Department of Foreign Affairs on Friday, Oct. 21.

The MoU is among a list of 13 “Signed Cooperation Documents” that serves as an annex to the joint statement. 

“[I]n the end we’ll have to see what this joint committee accomplishes now that it has been established,” Mr. Rood said in an email to BusinessWorld.

Despite an international tribunal’s ruling reinforcing the Philippines’ stake in its maritime dispute with China over the South China Sea, President Rodrigo R. Duterte agreed to “cooperation” with China on the matter.

The joint statement is notable, among other things, for duly acknowledging the United Nations Convention on the Law of the Seas (UNCLOS) -- the basis of last July’s arbitral ruling by the Permanent Court of Arbitration in The Hague in favor of the Philippines. Although China rejects the ruling, it is a signatory to UNCLOS.

“Both sides commit to enhance cooperation between their respective Coast Guards, to address maritime emergency incidents, as well as humanitarian and environmental concerns in the South China Sea, such as safety of lives and property at sea and the protection and preservation of the marine environment, in accordance with universally recognized principles of international law including the 1982 UNCLOS,” read a joint statement by the two increasingly collaborating states.

Mr. Rood believes “increased communication between the two coast guards would be very useful.”

“The Chinese vessels confronting Filipino fishermen at Scarborough Shoal are coast guard ships. And the Philippine coast guard is expanding its fleet with new boats from Japan. So, there is likely to be more proximity of the two forces,” he said.

The memorandum further cements Beijing’s commitment to the 2014 Code for Unplanned Encounters at Sea, an international agreement that helps prevent incidents at sea from escalating, Mr. Rood explained.

Mr. Rood added that the China-Philippines agreement “does not amount to giving up claims to the West Philippine/South China Sea.”

“The 2012 incident began with the Philippine Coast Guard trying to enforce fishery laws as Chinese fishermen were accused of harvesting endangered species. It would be useful if the Chinese Coast Guard can be persuaded to help with this kind of maritime cooperation to protect the environment,” he explained further.

The cooperation documents are a result of Mr. Duterte’s four-day state visit to Beijing -- widely acknowledged in terms of the Philippines seeking economic cooperation with China, and also seen by political watchers as a diplomatic coup initiated by Manila in Beijing’s behalf.

The trip, however, has also been further complicated by Mr. Duterte’s latest offensive remarks against Washington. Before an audience of businessmen on Thursday night, he publicly announced “my separation from the US,” among other remarks that immediately prompted the baffled response of Washington and others keenly following this geopolitical development.

The US, amid its security direction of pivoting to Asia, had backed the Philippines in its historic case before the Hague tribunal. But Mr. Duterte, along with his series of tirades against Washington, has contradicted the US position with his pivoting toward China.

The Philippines’ comprehensive, 47-point joint statement with China affirmed several areas of further bilateral cooperation.

Trade and investments were at the forefront of Mr. Duterte’s mission. But the resulting joint statement also covered such wide-ranging areas as science and technology, infrastructure, agriculture, education, diplomacy, and even defense cooperation -- as well as cooperation in anticrime efforts, notably Mr. Duterte’s war on illegal drugs.

Mr. Duterte early in his administration had singled out China as a source of drug trafficking hounding the Philippines.

In contrast, the joint statement said in part: “To further strengthen the efforts to fight against illicit drugs, both sides agree to establish operation mechanism for joint investigation on special cases and intelligence collection purposes.”

“The Philippines thanks China for its offer of assistance in personnel training and donation of drug detection, seizure, and testing equipment to aid in the fight against illicit drugs,” the statement also said.

One cooperation document in that area is the “Protocol on Cooperation between the Philippines Drug Enforcement Agency and the Narcotics Control Bureau of the Ministry of Public Security of the People’s Republic of China.”

In diplomacy, “[t]he Philippines welcomes China’s proposal to open a Consulate-General of the People’s Republic of China in Davao in due course.”

“Proper arrangements for the diplomatic premises in both countries will be made in the spirit of the 1975 Joint Communique, on the basis of international practice and reciprocity, with priority for the most immediate concerns,” the statement also said, referring in part to diplomatic initiatives toward China by the Marcos regime in the 1970s.

Notable too was the joint statement’s acknowledging the international bodies to which the US is also a party.

“Both sides affirm their continued cooperation in UN, ASEAN Regional Forum, Asia-Pacific Economic Cooperation, Asia-Europe Meeting, World Trade Organization, UN Climate Change Conference and other regional and multilateral organizations,” the statement went, adding:

“Both sides reaffirm adherence to sovereign equality, non-intervention, and non-interference enshrined in the UN Charter and reiterate their common commitment for the protection and promotion of human rights through dialogue and cooperation in light of the core human rights instruments to which both countries are parties to.

“Both sides support the enhancement of the UN’s role through necessary and reasonable reforms. Both sides held that pushing for the implementation of development issues, upholding the legitimate rights and interests of developing countries, enhancing the voice and representation of developing countries in international affairs should be the priorities in the reform of the UN, including the Security Council, and increasing the role of developing countries in UN decision-making.”

On the economic front, other agreements in the list of cooperation documents include:

A “Memorandum of Understanding between the National Economic and Development Authority [NEDA] of the Republic of the Philippines and the National Development and Reform Commission of the People’s Republic of China for Developing Cooperation on Production Capacity and Investment.”

Another agreement covering NEDA is the MoU with “the Ministry of Commerce of the People’s Republic of China on Formulation of the Development Program for Economic Cooperation.”

A “Memorandum of Understanding between the Department of Transportation and the Department of Public Works and Highways of the Republic of the Philippines and the National Development and Reform Commission of the People’s Republic of China on Transportation Infrastructure Cooperation Project List.”

A “Memorandum of Understanding between the Department of Trade and Industry of the Republic of the Philippines and the Ministry of Commerce of the Government of the People’s Republic of China on Strengthening Bilateral Trade, Investment and Economic Cooperation.”

A “Memorandum of Understanding between the National Economic and Development Authority of the Republic of the Philippines and the Ministry of Commerce of the People’s Republic of China on Formulation of the Development Program for Economic Cooperation.”

A “Memorandum of Understanding between the Department of Finance of the Republic of the Philippines and the Ministry of Commerce of the People’s Republic of China on Supporting the Conduct of Feasibility Studies for Major Projects.”

A “Memorandum of Understanding on Financing Cooperation between the Export-Import Bank of China and the Government of the Republic of the Philippines, represented by the Department of Finance.”

source:  Businessworld

Beijing hawks out to humiliate Manila

Beijing would antagonize Filipinos by setting conditions on their fishing in Scarborough Shoal. President Rodrigo Duterte, in striving to mend frayed ties with the giant neighbor, is unlikely to take that lightly. China’s wooing of the Philippines from military closeness to the United States would be wasted.

Restrictions mean China won’t stop bullying the Philippines, and embarrassing their President would turn Filipinos farther away. More so since Duterte, currently visiting China, humbly is asking Beijing to let his poor countrymen share in the shoal’s fish bounty as before.

Beijing political hawks reportedly want top communist leaders to humiliate the Philippines by subjecting Scarborough to conditions. Foremost is for Manila to concede territorial sovereignty to Beijing. But Duterte cannot do that without risking impeachment, he acknowledges. Only 123 miles from Zambales but 900 miles from China’s nearest coast, Scarborough faces Subic Bay where the US Navy berths under a military pact with Manila. Beijing deems the shoal strategic in facing off with America in the South China Sea, and is planning to build its own naval facility there. Before setting off for China, Duterte tried to please his Beijing hosts by announcing the end of joint naval patrols and military exercises with America.

Another Scarborough restriction would be for Filipinos to fish only outside, as the huge horseshoe-shaped shoal is overfished. Wu Shicun, head of China’s National Institute for South China Sea Studies, stated that in a recent interview. Ironically, it was Chinese destructive fishing that triggered tensions with Manila in the summer of 2012. More than six dozen Hainanese vessels were hauling in endangered sea turtles, giant clams, and fan corals, prompting the dispatch of Philippine patrols. Chinese warships came to the poachers’ rescue, and have since roped off the shoal from Filipinos.

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Scarborough, well within the Philippines’ 200-miles exclusive economic zone, is traditional Filipino fishing ground. Under the UN Convention on the Law of the Sea, it is the Philippines that must set fishing restrictions for marine conservation and maritime safety. China’s occupation incited demonstrations of Filipinos in world capitals, and a victorious arbitration at The Hague. If Beijing considered the case filing an affront, then more so the outcome last July. The UN court ruled that China’s territorial claim over most of the South China Sea was spurious and illegal. China also broke international law in barring Filipino fishers, and in building artificial island-fortresses in other reefs within the Philippine EEZ. Since the ruling declared Scarborough as a traditional fishing ground of other nationals as well, it is all the more the duty of Manila to conserve the shoal’s resources for future generations.

A recent poll showed 76 percent of Filipinos overwhelmingly trusting America, with only 22 percent for China. Yet, as they also are mostly satisfied with Duterte, Filipinos are going along with his pivot from America to China – but only to tolerable limits.

China’s grab of Scarborough has been likened to a bully neighbor barging into and squatting on a Filipino home. Filipinos, accepting their lack of military firepower, accommodated the trespasser as also in need of food. But Beijing’s setting of conditions on Scarborough is like the bully now restricting the homeowners’ access to their dwelling.

Filipinos also are disappointed with America’s weak response towards China’s bullying, while constantly claiming that its military alliance with Manila is ironclad. Thus they are willing to try out China’s economic offers for closer ties. But should China mess it up with insulting conditions for fishing in their own waters, Filipinos readily would return to the US side. After all, it’s the devil they know.

* * *

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Changes in the BPO landscape

The year has not yet ended but I believe that the most used word in the country this year is “change.” Now, how you view change, whether as something to be feared or as a challenge to improve, will determine how you respond to it and how it, in turn, will affect you.

One industry has charted its own course this year amid this sea of change. The Information Technology and Business Process Management industry or IT-BPM has thrived in the last 20 years to become one of the country’s primary economic drivers with more than one million full-time employees (FTE) and more than $22 billion in revenue as of 2015. The industry is on track to meet its 2016 goal of 1.3 million direct employees and $25 billion in revenue.

However, the IT-BPM industry continues to face dramatic changes and opportunities happening in the BPO industry internationally and locally.

Internationally, the changes and opportunities can be grouped into megatrends. The Shared Services & Outsourcing Network’s (SSON) 2016 Mega Trends report identified five megatrends, or five strategies, that shared service centers (SSCs) globally are adopting to varying degrees: (1) delivery of dramatic value beyond cost savings, (2) employment of eight key ‘value-driver’ strategies, (3) skillset development supporting value-adding services, (4) use of data analytics (transforming data into useful information for decision making), and (5) emergence of Robotic Process Automation (RPA).

What interests me in particular are the eight key value-drivers that SSCs are implementing: (1) data analytics, (2) digital disruption, (3) global business services, (4) global talent management & work force planning, (5) organizational redesign, (6) operational agility, (7) process excellence, and (8) RPA.

In my work with various SSC clients, I found that SSCs that have applied at least half of these value-drivers have experienced tremendous benefits in terms of efficiency, effectiveness and cost savings.

What I also noticed is that these megatrends similarly reflect the results that came out in Shared Services: Multiplying Success (PwC’s 2016 global biennial survey of the global shared services industry), where a total of 75 companies from various industries in more than 20 countries representing 300 SSCs participated. What the PwC survey showed is that shared service business models have to continuously improve to respond to global economic and political trends and social changes. 

The survey revealed that SSCs are still key drivers for increasing efficiency and lowering costs for organizations. Companies have tasked their SSCs to increase their levels of efficiency and continuously improve effectiveness. This is because full efficiency has not been achieved and there is still room to improve.

Similarly, Quality and Continuous Improvement programs have been widely adopted in SSCs but their full benefits are still to be realized. In spite of this, companies that have implemented Continuous Improvement Process (CIP) have seen significant process improvements and cost reductions.

Companies are now implementing a multifunctional service strategy. This means that SSCs are changing or transforming themselves into multifunctional service centers that operate with global focus rather than just the traditional Single Tower concept (or SSCs with only a single function). Organizations are expanding their process scope, consolidating their functions geographically to bring them into one operational framework. 

Improved corporate governance and controls are areas where SSCs have contributed immensely to their organizations as regulatory requirements and reporting have increased in complexity and in frequency.

Another insight from the survey is that technology has been one of the major drivers in the success of SSCs. SSC centers globally are investing in new and upcoming technologies. RPA, predictive analytics, cognitive platforms, and smart contracts are being developed to improve the performance, efficiency, and effectiveness of SSCs. Even the skills of shared services employees are becoming more integrated. A new generation of ‘digital natives’ or the ‘millennial’ employees is starting to dominate the SSC workplace.

So how are these international developments affecting the Philippines IT-BPM industry? The short answer is -- a lot.

In the Philippines, the IT and Business Process Association of the Philippines or IBPAP has supported the growth of the IT-BPM industry since 2004. On Oct. 28, IBPAP will be presenting its 2022 road map during its 2016 International IT-BPM Summit. According to IBPAP CEO Benedict Hernandez, just like the 2010 and 2016 road maps, the 2022 road map is a comprehensive plan that will propel the industry to the next level and address pressing concerns regarding talent, next-wave cities development, private and government support, academe support, and emerging technology trends.

What is unique about this road map is the inclusion of the detailed visions, plans and targets of the six associations or verticals that comprise IBPAP. These are the Animation Council of the Philippines, Inc. (ACPI), Contact Center Association of the Philippines (CCAP), Game Developers Association of the Philippines (GDAP), Global In-house Centers Council (GICC), Healthcare Information Management Association of the Philippines (HIMAP), and Philippine Software Industry Association (PSIA).

I am very interested to know how IBPAP plans to penetrate and take advantage of the full potentials in health care, gaming, software development, animation, and multimedia.

Now, with all the detailed plans for the IT-BPM industry, it would be easy to forget that the 2022 road map also addresses the emerging developments in the global offshoring industry.

The road map indicates that IBPAP and its members are aware that SSCs located in other territories are transforming their operations to be more relevant and integrated into their global operations. This means that Philippine-based SSCs must also transform and make their operations an integral part of the company’s business operations and strategic business decision-making process.

Fortunately for the Philippines, I see locally based SSCs already transforming their operations to be more efficient and effective with the goal of being the “knowledge center” of their company’s global operations.

I believe the IT-BPM industry will continue to thrive and take advantage of the current environment of change just as it has done in the past 20 years. I still see the Philippines as one of the top destinations for companies to set up their SSCs.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of PricewaterhouseCoopers Consulting Services Philippines Co. Ltd. The firm will not accept any liability arising from the article.

Victor Ona is a senior manager belonging to the Management Consulting practice of PricewaterhouseCoopers Consulting Services Philippines Co. Ltd., a Philippine member firm of the PwC network. 

+63 (2) 845 2728 ext. 3236

victor.gabriel.ona@ph.pwc.com

source:  Businessworld

EDITORIAL: Can’t win?

The second paragraph of the second section of Article XII of the Constitution is an explicit order: “The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.” The power to reserve exclusivity is patrimonial in nature; it is based on the state’s responsibility to “conserve and develop our patrimony.” But this power is itself based on a more basic responsibility: that of the military, acting on behalf of the people, “to secure the sovereignty of the State and the integrity of the national territory.”

The landmark decision of the Permanent Court of Arbitration in The Hague on the suit lodged by the Philippines against China was a sweeping victory for the Philippines. Among other findings, it held, without pronouncing on the question of sovereignty over Scarborough or Panatag Shoal, that China had violated the Philippines’ rights and freedoms within its exclusive economic zone, by preventing Filipino fishermen from fishing in or around the shoal. The arbitral court held that both China and the Philippines enjoy “traditional fishing rights” in the area which were not extinguished when the United Nations Convention on the Law of the Sea took effect.

On Oct. 10, just about three months after the arbitral court released its decision, President Duterte said something which effectively threw this hard-earned victory out the window. Addressing residents of Lamitan, Basilan, the Commander in Chief touched on the country’s relations with China.

“I have a good feeling that we will be OK with them. But first let’s not touch the Scarborough Shoal issue because we cannot win that,” he said. “Even if we get angry, we’ll just be putting on airs. We can’t beat [China]. We’ll ask them to allow our fishermen to [return] to their traditional fishing ground in Scarborough.”

In truth, this is not new. Mr. Duterte has said before that he will ask Beijing to allow Filipino fishermen to return to Scarborough. If this return takes place, it will mark the first time that the fishermen from Zambales and other nearby provinces will be able to fish in the area since 2012. This is a victory, too, and for the fishermen it could not have come any sooner.

But what made the President’s latest remarks controversial were the assumptions he brought to the subject. First, a touchy-feely approach to foreign relations (“good feeling,” “OK”) that seems to prize cordial relations with an emerging superpower over national interest. Second, a defeatist attitude that misrepresents popular sentiment on the South China Sea issue. It is true that, if a military confrontation took place in Scarborough, “we cannot win that.” But popular opinion in the Philippines recognizes that “touching the Scarborough issue” is not in fact limited to the military option alone. As a small player in the regional scene, we must work with our allies, we must exhaust the diplomatic possibilities, we must seek redress from international courts, to fight the bullying. Indeed, that explains the public demonstrations that spontaneously greeted the sweeping legal victory of July 12. The President does not reflect the popular will on the issue, if he fails to “touch” the Scarborough case.

Third, the political leader who has spent his entire career on bravura expressions of crime-fighting and corruption-fighting suggests that “getting angry” is mere theater, because we do not have the resources to match those of China. This is an argument that must be debunked; it is not true that if we get angry with China because it has bullied us, we are only putting on airs.

The arbitral decision is itself proof that even the small and the bullied can put up a fight.

source:  Inquirer

Duterte likens Panatag to a tilapia pond

President Duterte is going to China next week.

He expects to bring home a lot in terms of promised investments and assistance.

In fact, the delivery of the largesse from China has already started. Last week, Malacañang announced the lifting of the embargo on the exports of banana to China and tourists to the Philippines which was imposed when the government of Benigno Aquino III sued in the Arbitral Court in January 2013 to nullify China’s nine-dash line map which included substantial portion of Philippine territory.

Duterte has been talking a lot about China financing the building of rehabilitation centers for drug addicts in Fort Magsaysay in Nueva Ecija.

But topmost in his agenda is for the Filipino fishermen to be able fish again in Scarborough Shoal, 124 nautical miles from Zambales, which has been in control of China since April 2012 due to the mishandling of the situation by Aquino and Foreign Secretary Albert del Rosario.

The loss of Scarborough shoal is the legacy of Aquino to the Filipino people. Yet many hail him   for winning the case in the Arbitral Court.

The Arbitral Court said that Scarborough Shoal is a rock and is not entitled to a 200 nautical mile economic exclusive zone.

The Arbitral Court further said that Scarborough Shoal has been a traditional fishing ground of Filipino, Chinese, Vietnamese as well as fishermen of other nationalities and should continue to be so.

China’s blocking of Filipino fishermen’s access to the shoal, the Arbitral Court further said.

The Duterte government has agreed to China’s condition that any talk on Scarborough and the Spratlys should not mention the Arbitral Court decision.

But at the same time, Duterte seems to have downgraded, not only the value of the Arbitral Court decision, but also the importance of Scarborough Shoal, which he compares to a tilapia fishpond. Here are his statements:

In a speech last October 4 in the Sulong Pilipinas Convention he said: “Here is the arbitral judgment that we are entitled to the entitlements, it is not a territorial thing. Twelve miles lang iyan eh, that’s it. Iyong 200 miles, parang fishpond iyan o. Philippines ito iyong fishpond mo, kanya-kanya tayong fishpond. Itong pinag-awayan dito, iyong fishpond, iyong mga tilapia sa loob pati iyong... kung may oil diyan. This is a territorial. So we won, right, but what do you want? There are two ways of doing it. We seize it forcefully, or we talk? Mamili kayo diyan. Eh kung gusto niyo iyan, eh okay lang naman.”

He repeated this last Tuesday during the mass oath taking of the officials of the League of Municipalities of the Philippines: “May arbitral ruling tayo, we won. We are entitled to the entitlements of that part of the South China Sea na atin.
Entitlements, it is not territory, the territory is 12 miles. Beyond that is iyong ating… tinatawag natin parang fish pond. Lahat naman tayo binigyang ng fish pond o, iyan inyo, inyo Philippines. You have a, count it from the outermost line then do a line there and that’s yours. Lahat tayo may ganoong. But China is claimed it to be part of their historic sovereign territory. Okay tayo ang nagfile, panalo tayo. Okay magbotohan tayo. I will insist, pag ayaw nilang ibigay atakihin ko sila, I’ll start war.

Mapahiya tayo pag hindi. O ito, o sino ngayon magsabi ito, birahan natin bukas. Padala ko yung Navy doon bukas. I’ll send the gray ships there. It will be massacre, and to top it all the battle ground would be Palawan…”

The President is getting confused. He is talking of sending ships to Scarborough Shoal, which is in Zambales, and he talks of Palawan as battle ground.

In Lamitan also last Tuesday, he was clearer with his decision: “Wag na muna nating pakialamanan iyang Scarborough, kasi hindi natin kaya eh. Magalit man tayo hangin lang, hindi natin kaya. So mag-usap muna lang tayo, sabihin ko na lang na ipabalik mo lang iyang mga kapatid kong Pilipino mangisda saka mag-usap tayo.”

With the Philippine President asking the permission of China to allow Filipino fishermen in Scarborough Shoal, isn’t it a recognition of China’s sovereignty over the disputed area?

***

Blog: www.ellentordesillas.com

E-mail: ellentordesillas@gmail.com

source:  Malaya Column of Ellen Tordesillas

Only US can stop China – carpio

ONLY the United States can stop China’s grip in the West Philippine Sea (South China Sea), Senior Associate Justice Antonio Carpio said amid President Rodrigo Duterte’s anti-American stance.

At the close of joint exercises between the Philippine and US marines on Wednesday, Carpio said the Philippines should continue joint patrols with the US to protect its exclusive economic zone (EEZ) as mandated by the 1987 Constitution.

“There is only one power on earth that can stop the Chinese from poaching in our EEZ. That is the US,” said Carpio who was the guest of honor and speaker at the closing ceremony of the 33rd Philippines Amphibious Landing Exercise at Fort Bonifacio in Taguig late Tuesday afternoon.

Article 12, Section 2 of the Constitution states that: “The State shall protect the nation’s marine wealth in its
archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.”

Also on Tuesday, Sen. Panfilo Lacson said the country would not be able to survive external threats without the US, disputing a statement by Defense Secretary Delfin Lorenzana that the country could do without Washington’s military support.

President Duterte has been attacking the US over its criticism of his anti-drug war, and said he would seek closer ties with China and Russia.

Malampaya attack feared

Carpio said the country would lose billions of pesos if the Malampaya natural gas project off Palawan, Metro Manila’s power source, is attacked. The only way to protect it is to send patrol ships in the disputed waters, he said.

“The Philippines must protect its EEZ. That’s the mandate of the Constitution … if a foreign fishing vessel will poach on our waters in the EEZ, the only way we can stop them is to have a patrol there, there’s no other way,” he added.

Col. Edgard Arevalo, chief of the Armed Forces of the Philippines (AFP) Public Affairs Office, said Task Force Malampaya has been patrolling the area.

“The task force, including our headquarters Naval Forces West and Westcom (Western Command) frequent Malampaya. So in the process they are on the lookout for any threats to the continuous operation of Malampaya,” he said.

Asked to comment on Carpio’s statement that the AFP has the duty to patrol the country’s EEZ, Arevalo said: “Everybody agrees to the Constitution because that is the supreme law of the land.”

Still, no war games
On Wednesday, President Duterte stood firm on his decision to end the annual joint military exercises between the Philippine and the United States.

Called “Balikatan,” meaning shoulder to shoulder, the exercises have been the cornerstone of Philippine-US military relations since the US bases in the Philippines shut down more than two decades ago.

In his speech during the 115th anniversary of the Philippine Coast Guard on Wednesday, Duterte said he had told the Defense Secretary Lorenzana “not to prepare anymore” for next year’s military exercises with the US.
“I don’t want it anymore,” he said.

The President reiterated he would maintain the military alliance with the US while the Philippines charts an “independent” course.

“I’ll chart an independent foreign policy. We will not break our alliances … But we need not really, you know, break or abrogate existing treaties because they said it would provide us with the umbrella,” Duterte said.

source:  Manila Times

US vs China: Who matters more?

SOME WORRY that our outspoken President may be unnecessarily antagonizing the United States for our country’s own good, while sounding deliberately gentle with China—in the name of pursuing an “independent foreign policy.” This piece’s title notwithstanding, I am not about to argue here that we must choose one over the other. It’s fair to say that historically, both of them have helped us, and wronged us as well. In the overall scheme of things, it may not be obvious who has been and who will prospectively be the better friend or worse foe to us Filipinos. It has been argued that our independence would be best asserted by being on good terms with everyone. Indeed, it would be in our best interest as a small country to be seen as impartial in dealing with other countries, particularly the world powers, and in defining our country’s standing in the global community.

Still, I thought it might be interesting to assess and compare the nature of our economic linkages with the two countries, as this looms large in any reckoning of our relationships with either of them. I will steer clear of the political and other dimensions of those relationships, as that would be straying beyond my own area of expertise. On economic relations, the most obvious measures for which we have the data are those pertaining to trade, investments, and overseas remittances.

How important are the United States and China to us as trading partners? Overall, it would appear that they are equally important, as combined exports and imports with each are both in the neighborhood of 13 percent of our total for all countries. The United States is more important to us as an export market, accounting for 15 percent of our total exports in value terms, against China’s 10.9 percent. As source of imports, the reverse is true, with our official figures showing less of our imports (10.8 percent) coming from the United States than from China (16.2 percent). The latter figure is likely to be even higher, given the rampant smuggling of goods into the country, particularly from China. Recently it was reported that China’s data on exports to us are 60 percent higher than our corresponding data on imports from it, indicating the extent of such undocumented imports.

What do we sell to the two countries? Dominating our exports to both (50 percent of our exports to China, and 39 percent to the United States) are electronic products, mostly in the form of intermediate products such as semiconductors and circuit boards. For China, mineral ores are also prominent (14.5 percent), with shiploads of virtual raw earth, mostly nickel ores, being shipped there every week. Rounding up our top five exports to China are chemicals, miscellaneous manufactures and machinery/equipment. For the United States, garments are our second top export (14 percent), followed by coconut oil, miscellaneous manufactures, and ignition wiring sets for motor vehicles. These give us some idea on which industries—hence which types of workers—benefit from our trade with either country, and correspondingly, who would be adversely affected by a cutback in trade, as fallout from possible political conflict. Offhand, it appears that proportionately more workers benefit from our exports to the United States than to China, with labor-intensive manufactures more prominent in our top five exports to the former.

What do we buy from the two countries? Topping our imports from both are electronic products in the form of basic components for further assembly and finished consumer products. These comprise nearly half (48.2 percent) of total imports from the United States against less than a fifth (19.3 percent) from China. Agricultural products in the form of animal feed stuffs, cereals and preparations (including flour), and other food and live animals are prominent imports from the United States, along with industrial machinery and equipment. From China, our other top imports are iron and steel, industrial machinery and equipment, miscellaneous manufactures, and metal products.

As source of foreign direct investments (FDI), the United States is far more important to us than China, accounting for 13 percent of total net FDI inflows in 2015, against China’s negligible 0.01 percent (less than $1 million). In 2014, only 2 percent of total Chinese investments into Asean reportedly went to the Philippines. Chinese Ambassador Zhao Jianhua is reported to have acknowledged that the Philippines invests more in China than China does in the Philippines. Its most visible investments here are in power, shipping and mining. The Chinese government owns a 40-percent stake in the National Grid Corp. of the Philippines, and is also reported to have acquired a controlling stake in Negros Navigation Corp. operating the 2GO Travel lines.

A recent article in the Journal of Political Risk lists some 25 Chinese mining firms known to have investments in the country as of 2012, albeit not officially recorded. It cites investigative media reports portraying Chinese mining companies to be engaged in “improper” and “less than legal” mining operations in the country. On the other hand, US investments in the country have a long history and are much more substantial and varied, spanning the agriculture, industry and services sectors.

As for remittances, Bangko Sentral ng Pilipinas data report that nearly half (43 percent) comes from the United States, and less than 1 percent from China. It would seem from all this that on purely economic terms, we stand to lose more from antagonizing the Americans than the Chinese. But as we’ve stated at the outset, it’s best not to antagonize either. Whether in trade, investments or remittances, we need both—and we need much more.

* * *

cielito.habito@gmail.com

source: 

By: Cielito F. Habito

Philippine Daily Inquirer

Duterte a ‘game changer’ in US-China rivalry

MANILA/HONG KONG -- Just when some of China’s neighbors were seeking to curtail its expansionism, along came Rodrigo R. Duterte.

In less than three months on the job, the 71-year-old Philippine leader has used expletives in talking about US President Barack H. Obama and vowed to end cooperation with the US military in both fighting terrorism and patrolling the disputed South China Sea. He’s moved to boost economic and defense ties with China and Russia.

While Mr. Duterte is unpredictable -- one day calling China “generous” and the next threatening a “bloody” war if Beijing attacked -- his behavior has undermined US efforts to rally nations from Japan to Vietnam to Australia to stand up to China’s military assertiveness.

In doing so, Mr. Duterte risks shifting from the 1951 Philippine-US defense treaty, which has been a bedrock of American influence in the region.

While Mr. Duterte has said he’ll respect the alliance he’s repeatedly stressed the need for an “independent foreign policy” and questioned America’s willingness to intervene if China were to seize territory in the South China Sea.

“This could be the game changer for the South China Sea situation in general and Sino-US regional competition specifically,” said Zhang Baohui, director of the Center for Asian Pacific Studies at Lingnan University in Hong Kong.

“Mr. Duterte’s foreign policy may dramatically shift the geostrategic picture of the region, leaving China in an advantageous position versus the United States.”

One of the biggest benefits for China is the potential for a deal over the South China Sea. Just weeks after Mr. Duterte took office in late June, an international arbitration panel ruled that China’s claims to most of the waterway had no legal basis -- a win for the Philippines in a case brought by Mr. Duterte’s predecessor.

While Mr. Duterte has said he’ll respect the agreement, he’s signaled he’s open to talks with China, the country’s biggest trading partner, and he did not push for the ruling to be mentioned in the communique last week from a summit of Southeast Asian leaders in Laos. Before taking office, he said he’d consider setting aside territorial disagreements to get a Chinese-built railway.

In July, Mr. Duterte sent former President Fidel V. Ramos to Hong Kong to explore common ground with China.

Mr. Ramos later called for a bigger role for the Philippines under China’s plan to link ports and other trading hubs throughout Asia to Europe.

‘WRONG MESSAGE’
Chinese Foreign Ministry spokeswoman Hua Chunying said Sept. 6 that China is “willing to make a joint effort with the Philippine side to rebuild mutual trust and push forward the bilateral ties.”

“Let’s not be naive about this, there’s no other country that will benefit from our differences with the US and our other allies but China,” said Lauro L. Baja, Jr., a former Foreign Affairs undersecretary who served as the Philippine permanent representative to the United Nations under ex-President Gloria M. Arroyo.

“Whether we like it or not, we’re sending the wrong message to the US, China and our other allies with these actions and pronouncements.”

China claims sovereignty over all features that lie within a nine-dash line drawn on a 1940s map enclosing more than 80% of the South China Sea. It says that gives it the right to interdict military ships close to its territory -- a position the US opposes. Fu Ying, who chairs the Foreign Affairs Committee of China’s top lawmaking body, this month framed US-China tensions in the South China Sea as a fight over the freedom of navigation for naval warships and other non-commercial vessels within the 200 nautical mile exclusive economic zones of coastal states.

“The Chinese want the South China Sea to become a Chinese strait, with control of the maritime space and the air space above it,” said Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute in Canberra.

“That is the long term game, and flipping Mr. Duterte over to Beijing’s side is part of the play.”

China’s land reclamation and military buildup in the waters has in recent years pushed some neighbors closer to the US The Obama administration has boosted military cooperation with nations such as Vietnam, the Philippines, Singapore, and Japan.

Still, at the summit last week in Laos, a spat with Mr. Obama over Mr. Duterte’s war on drugs and the thousands of deaths it has caused overshadowed any criticism of China.

“That’s a very bad scenario,” said Hideki Makihara, a senior lawmaker in Japan’s ruling Liberal Democratic Party, referring to a potential Philippine strategic alignment with China.

In that case, “at least we need Vietnam, Malaysia and other countries surrounding the South China Sea in our group,” he said in an interview this week in Tokyo.

BACKLASH RISK
For now, US officials are emphasizing the benefits of defense ties with the Philippines. “We’ve got a wide range of shared concerns and shared interests, and the United States and the Philippines have been able to work effectively together in a variety of areas to advance our mutual interests,” White House press secretary Josh Earnest said Sept. 12.

But a shift toward China may be difficult for Mr. Duterte to sustain. If Beijing refuses to make any tangible concessions on the South China Sea -- particularly over fishing resources at the disputed Scarborough Shoal -- Mr. Duterte may face a backlash at home, according to Richard Javad F. Heydarian, an assistant political science professor at De La Salle University in Manila.

“This is precisely why security relations with the United States will remain indispensable for the Philippines,” Mr. Richard Javad Heydarian wrote in an article last week for the Washington-based Asia Maritime Transparency Initiative.

Still, the US can no longer expect the same level of strategic deference and diplomatic support.

“This is the new normal in Philippine-US relations.” -- Bloomberg