On Thursday last week in Beijing, when President Duterte declared a “separation” from the United States, he was wildly applauded, especially by local businessmen.
But there were also many participants in the business forum, which was attended by close to a thousand businessmen from Philippines and China, who were visibly stunned by the bold declaration.
Even some members of Duterte’s Cabinet were taken aback.
The major pronouncement dominated the informal discussions of the delegates—who were generally supportive of Duterte—as well as members of the media covering the state visit.
News of the large investment and financing commitments, which summed up to $24 billion during the trip, was overshadowed by what was so far the strongest anti-American rhetoric from the tough-talking Philippine President.
It was all delegates could talk about for the rest of the night and the following day. Asked about his insights as an outsider, Malaysian Karim Raslan—chief executive officer of KRA Group, a Southeast Asian public affairs consulting firm specializing in stakeholder relations, political risk and business advisory—said in an e-mail that the Philippines had been a “slavish” supporter of the Americans for decades.
He sees this bold diplomatic realignment as a “dramatic wake-up call” but noted it would help if economic gains from the country’s alliance with the US could be preserved.
“The Republic desperately needs Chinese infrastructure investment and tourist dollars. However, the American alliance has also been extremely beneficial for the Philippines and more importantly, ordinary Filipinos,” Raslan said. “These advantages must be safeguarded.”
Raslan noted that nearly 65 percent of the country’s BPO market—an industry that employs over a million Filipinos— was anchored on the United States.
At the same time, Filipinos from the US sent home around $9.7 billion in remittances in 2015 alone.
Michaelangelo Oyson, president of local stock brokerage BPI Securities, said in a text message that investors would need to digest the economic and market implications of the President’s recent foreign policy pronouncements.
“In general, foreign investors will assess whether the pronouncements and the eventual official foreign policy will improve the macroeconomic outlook of the Philippines,” Oyson said.
“It is understandable that some investors will raise concerns of rising risk premium for the Philippines given that the pronouncements point to uncharted territories for the Philippines, both politically and economically,” he added
Key Cabinet members, meanwhile, chose to focus on the success of the trip to China and regional integration themes.
“We will maintain relations with our partners, but we would revive the stronger integration with our neighbors,” said Trade Secretary Ramon Lopez, who announced $24 billion worth of investment and financing deals from China at the end of the four-day state visit.
Foreign Affairs Secretary Perfecto Yasay Jr. added: “There are all along the lines of making sure that we engage ourselves more vigorously in very strong economic and development cooperation.”
“Our economic policy will just change and the change is about opening our doors to other countries. That’s it. And we have an independent foreign policy. This means that no one interferes and no one even tells us what to do. It is going to be a foreign policy that is made in the Philippines,” Communications Secretary Martin Andanar said.
Economic Planning Secretary Ernesto Pernia added: “What we are really going to do is rebalance our economic relations from too much dependence on the West to the Asian region. Because the Asian region is the growth area of this century and China is a major player in this growth area.”