Cagayan lures $3.9B in China fund pledges

The Cagayan Economic Zone Authority (Ceza) said it has secured a total of $3.9 billion worth of Chinese investment pledges on the sidelines of the recently concluded Belt and Road Initiative (BRI) Forum in Beijing.

The state-owned firm said in a statement on Tuesday that Ceza CEO and Administrator Raul Lambino signed seven memorandums of understanding (MOUs) and two Letters of Intent (LOIs) with Chinese companies.

Last month marked the second year of the BRI forum, which is also the second time President Duterte attended the event as he sought closer ties with China at the risk of weakening the Philippines’ claim over the West Philippine Sea.

The biggest among the deals signed by Lambino was the proposed $2-billion Smart City on Fuga Island, Appari town, which will be built by Xiamen-based Fong Zhi Enterprise Corp., Ceza said.

The amount Ceza said in the statement was bigger than the $500-million Smart City proposal previously reported on the sidelines of the latest BRI forum.

“The company will also set up an agricultural breeding center and soil improvement project, build medical schools, promote culture and tourism and establish a high-tech industrial park,” Ceza said.

A separate strategic cooperation agreement was signed between Fong Zhi Enterprise Corp. with Isla Fuga Resort Inc., owner of Fuga Island in Luzon, Ceza said.

Lambino said Ceza also signed LOIs with Baoye Construction Group and Tian Gong Construction Group based in Shaoxing City for the development of an integrated resort and global entertainment projects, a world-class golf course and other leisure and shopping facilities.

Shanghai Jucheng is planning a $150-million township and manufacturing plant for lithium batteries for sustainable energy production while Pai Hao is looking to invest $500 million for the upgrade and expansion of the Lal-lo International Airport for wide-bodied aircraft.

Shenzhen Dawah would partner with the Apsaras Group Ltd. to establish a $100-million marina, water sports training center and private villas. China Zhejiang Guannan Group, meanwhile, plans to put up a $500-million “green” textile production hub for global distribution.

Golden Millennial Quickpay Inc. plans to build a $100-million Fintech Hub on its 10-hectare property near the proposed Ceza Global City in Barangay Rapuli while Yatai International will acquire property for its $500-million satellite city.

Mr. Duterte first attended the forum in 2017 as his administration aimed to have closer ties with China at the expense of sidelining the country’s fight for its territorial claims in the West Philippine Sea.

The Philippines’ economic ties with China, however, have recently been put under scrutiny amid concerns that the country might eventually fall into a China debt trap, which the government’s economic managers have dismissed. This had been disputed by the government’s economic team, pointing out that Chinese loans represented a very small fraction of the country’s total foreign debt.

The administration’s conscious decision to be in China’s good graces has also been a constant topic in political conversations, especially with elections next month seen by some as a referendum for his policies so far.