Updated at 3:40 p.m. ET on 2019-08-05
President Rodrigo Duterte is to travel to Beijing this month, his fifth to China, his spokesman said Monday, amid reports the government was preparing to lease three northern islands to Chinese investors, including one near the Subic Freeport where the United States once had a major naval facility.
Duterte’s trip comes just shortly after he conceded in a speech to Congress last month that he could not do anything to prevent the Chinese from fishing in the Philippines’ exclusive economic zone, despite widespread criticism directed at his government after a Chinese trawler rammed a Filipino fishing boat in disputed waters.
While the details of Duterte’s trip were not released, his spokesman, Salvador Panelo, said the Philippine leader may discuss with his Chinese counterpart, Xi Jinping, a proposed joint oil exploration in the South China Sea.
“That could be part of the discussion. If it’s a working visit, then it refers to discussions with the visited country relative to issues that affect both,” Panelo told reporters.
During Xi’s state visit to the Philippines in November 2018, he witnessed with Duterte the signing of 29 vaguely worded bilateral deals, including one for oil and gas exploration in the disputed sea.
The presidential palace in Manila did not release copies of the documents, but BenarNews saw a copy of a memorandum of understanding over oil and gas development. It states that both countries agreed on a sharing deal, under which the Philippines would get a 60 percent stake in resources extracted from the Reed Bank and China would get the remaining 40 percent.
The Reed Bank lies within the Philippines’ exclusive economic zone in the South China Sea.
The previous government had a frosty relationship with China after former President Benigno Aquino III took Beijing to an international arbitration court, alleging it illegally occupied Scarborough Shoal, a rich fishing ground just west of the Philippines’ main island of Luzon.
An international court of arbitration ruled in Manila’s favor just shortly after Duterte took power in 2016, but he ignored the ruling and instead sought to repair ties with China. Duterte has made trips to Beijing more than any other Philippine president and relaxed rules allowing more Chinese tourists and businessmen into the country.
The latest visit comes amid a recent diplomatic protest filed by the government’s foreign ministry. The protests are in reaction to intelligence information provided by defense officials that Chinese boats had been spotted swarming the past few months near Pag-asa Island, a Philippine-occupied territory in the South China Sea.
Announcement of Duterte’s upcoming Beijing trip also came after a report by the Philippine Daily Inquirer that Chinese businessmen were apparently targeting three strategic islands in the northern Philippines in a bid to transform them into “economic and tourism zones.”
The investments, the newspaper said, are part of a $12.2 billion package secured by Duterte when he visited Beijing in April. One of the proposed investments is a $2 billion “smart city” to be built by Xiamen-based Fong-Zhi Enterprise Co. on Fuga Island, which is part of Cagayan province.
Fuga Island, one of the northernmost islands in the Philippines, is surrounded by the Pacific Ocean and the South China Sea. The two other islands are Grande and Chiquita on the mouth of Subic Bay in Zambales province.
Subic Bay history
Subic Bay hosted the biggest U.S. naval base in the region, but the Philippine Senate voted to end a lease agreement with Washington in 1991. After the last American ship sailed out of the deep-water bay, Subic was transformed by the Philippines into a free port.
Earlier this year, Philippine officials had expressed fears that China was looking to take control of Subic after its South Korean operator, Hanjin, filed for bankruptcy.
Among two Chinese companies bidding for control of Subic was a state-run company, local media had reported, stirring fears that Beijing could be planning to use the port as a listening post to the region. Subic faces the South China Sea, where China, the Philippines, Taiwan, Brunei, Malaysia and Vietnam have overlapping claims.
Beijing claims almost the entire South China Sea and has built military installations with advanced ballistic-missile capabilities on reclaimed islands under its control.
Last week, Chinese Ambassador Zhao Jianhua asked the other claimants to South China Sea territories to be patient while settling disputes, adding that Beijing would not start a war over the disputes.
On Monday, Philippine Navy spokesman Capt. Jonathan Zata said Fuga and all other features in the Batanes Group of Islands are considered strategic, citing it can potentially provide control and access to Luzon Strait.
“It is one of the rationales for establishing presence on Mavulis Island at the border with Taiwan,” Zata told reporters, describing Fuga Island as serving a unique role in the country’s national security because of its private airfield.
Defense Secretary Delfin Lorenzana, who earlier accused China of bullying his country, confirmed that the move by Chinese to invest in the three northern Philippine islands could have security implications for Manila.
“We are looking into it,” he told BenarNews, but did not want to speculate until after Duterte makes his trip.
Lorenzana, a former general, was among the first in Duterte’s cabinet to be angered by the ramming of a Filipino fishing boat two months ago. He angrily demanded an apology from Beijing, but Duterte had later downplayed the incident.
Jojo Rinoza in Dagupan City contributed to this report.