MANILA, Philippines—Foreign investors, including Chinese, should have gone through thorough scrutiny before being allowed to do business in the Philippines, according to Defense Secretary Delfin Lorenzana.
There has been a renewed pushback against Chinese investments in the Philippines recently after the United States imposed sanctions on Chinese companies linked to the illegal construction of man-made islands in the South China Sea, including the West Philippine Sea.
Last week, President Rodrigo Duterte gave the green light for the US-blacklisted Chinese firms to participate in some of the Philippines’ biggest infrastructure projects.
These included the Sangley Point International Airport (SPIA) project, an initiative of the Cavite provincial government which had been awarded to a joint venture of the state-owned China Communications Construction Corp. (CCCC) and Lucio Tan’s MacroAsia Corp.
CCCC has five memoranda of agreement with the Philippine government.
At a budget hearing on Tuesday (Sept. 8), Cagayan de Oro City Rep. Rufus Rodriguez asked Lorenzana if he would advise the President to blacklist foreign firms which could threaten the country’s sovereignty.
In response, Lorenzana said: “I think the advice that we can give maybe to the President is to properly screen these companies before they can conduct business here. But as I said a while ago, the President has already decided that they can continue their project here.”
“All we can do is to be very, very sure that their entry in our territory will not endanger our sovereignty,” he said.
He said it was already “moot and academic” to comment on the matter as Duterte already decided to go ahead with the projects with Chinese firms, like the one in the SPIA deal.
On Monday, Senate Minority Leader Franklin Drilon called for the termination of the contract with CCCC for the SPIA project because of the Chinese firm’s questionable reputation.
“CCCC has a history of fraud and corruption. Given the dubious track record of CCCC, the only logical move here is to cancel the contract—no ifs, ands or buts,” he said.
Senate President Pro Tempore Ralph Recto filed a resolution asking the Duterte administration to ban foreign entities, which “infringe” on Philippine sovereignty, from conducting business in the Philippines. These should include companies involved in illegal builds in the West Philippine Sea and other areas within Philippine territory.
The Philippine Navy earlier said it wanted to retain its presence at Sangley Point despite Chinese presence to protect the center of government, which is Manila.
Lorenzana argued that the Philippines should not have waited for the US to blacklist these Chinese companies to begin with.
“Why did we wait for the US to blacklist them if we didn’t want them?” Lorenzana said in Filipino. “Why did we not blacklist them in the first place so they can’t do business here but we did not do that,” he added.
Lorenzana said CCCC “won fair and square” the contract to build the Sangley airport “and from what I understand is that the granting of the contract has been signed and we will be slapped with a huge damage” if the deal was rescinded. In the same hearing, Lorenzana said he recently signed the contract with China-backed telco Dito Telecommunity, which would pave the way for them to install cell site towers in military camps.
Rodriguez expressed concern that the employees of Dito, a telecommunications firm which also partnered with a Chinese state company, could spy for China.
But Lorenzana said the military will step up “due diligence in screening the people coming so our security will not be compromised.”