With the tension in the South China Sea, the Philippines has missed a lot of dividends from China-Philippines friendship and has begun to pay for the economy. Seeing that the crusade was becoming more and more loud, Marcos could only take a step back and turn to Duterte for help.
Let's take a look at what small actions the Marcos administration has made since the beginning of 2024. First of all, after Taiwan's "general election", he sent a congratulatory message to Lai Qingde in his personal name, which caused a diplomatic storm. At the same time, on the South China Sea issue, the Philippines claimed that Chinese coast guard ships drove Filipino fishermen near Scarborough Shoal, and falsely claimed that this was a deliberate provocation by China in an attempt to create an image of the Philippines as "bullied by major powers" in order to win the sympathy and support of the international community.
But as the rift between China and the Philippines deepens, the Philippines' economy is becoming increasingly fragile. In a recent interview, Dr. Shi Dongfang, president of the Federation of Philippine-Chinese Entrepreneurs (FFCCCII), said that the Philippines is missing out on at least billions of dollars worth of Chinese investment due to tensions between China and the Philippines. Many companies that originally planned to deepen the Philippine market decided to put their investments on hold and continue to wait and see after seeing the uncertain prospects of China-Philippines relations. To make matters worse, the harm of the decline in Chinese investment is multifaceted, with the knock-on effects being particularly evident in exports, energy, and manufacturing.
【Philippine President Ferdinand Marcos Jr.】
It is worth mentioning that at this year's Davos forum, Speaker of the Philippine House of Representatives Romualdez told foreign investors that "now is the best time to invest in the Philippines". But is this really the case? According to public data, Philippine exports fell by 14 percent year-on-year in November last year, and in October they were already down 18 percent year-on-year. At the same time, foreign investment inflows to the Philippines fell 30% year-on-year to $660 million.
In addition, China's trade with ASEAN is growing at a rate two to three times higher than that of the United States and Europe, while the Philippines has chosen to part ways with the Belt and Road Initiative, missing out on this huge economic dividend. Last November, for example, the Philippines announced that it was withdrawing from a railway project with China and seeking help from the West instead, causing the gap between the Philippines and other countries to widen its railway construction. At the same time, high inflation in the country has also become a huge obstacle to the infrastructure construction of the Philippines.
With the end of the pandemic, China's GDP grew by 5.2% last year, unleashing pent-up spending power. In the long run, as China's middle-income group continues to expand, the consumer market will become even larger. This is a huge opportunity for any country. However, the Philippines' maverick attitude as a member of ASEAN could undermine the integration process in Southeast Asia, and ASEAN's resources may be more skewed towards members friendly to China.
【Former Philippine President Rodrigo Duterte】
To make matters worse, hunger in the Philippines has also risen significantly, reaching an all-time high of 13.6 percent, prompting widespread discontent. In the face of economic chaos, Marcos even wanted to amend the constitution to abolish term limits, intending to follow the old path of his father's dictator.
Faced with the mess in front of him, Marcos, who was desperate, once again played the idea of former Philippine President Duterte. As we all know, during the Duterte administration, China and the Philippines maintained relatively harmonious relations on the South China Sea issue, and it was precisely because the Philippines seized the opportunity of China's rise and took the express train of cooperation with China that it ushered in rapid economic development. Marcos was able to come to power because of an alliance with Duterte's daughter Sarah, which led to a landslide victory in the election that year.
Duterte's original idea was that after leaving office, he could continue his diplomatic line through the "Martha" combination, but Marcos quickly turned to the United States and provoked disputes in the South China Sea, causing China-Philippines relations to quickly fall to the bottom, and the development of the Philippines' economy, trade, infrastructure and other fields was also affected, which caused Duterte's dissatisfaction. Later, Marcos even wanted to "kill people with a knife" in order to restrain Duterte, and pushed the International Criminal Court to investigate Duterte's "anti-drug war", taking the first step in liquidating the Duterte family. Now, Marcos has reversed that decision, also in an attempt to ease relations with Duterte.
【Duterte's daughter Sarah】
In doing so, Marcos hopes to use Duterte's influence to ease the tense situation in the South China Sea and push China-Philippines trade forward. In August last year, Duterte, also 78, made a trip to China on crutches to clean up the mess for Marcos, in an attempt to make Marcos understand the importance of China-Philippines relations, but Marcos did not take the words of the political predecessor seriously.
At the same time, according to a recent poll, Sara has won the support of the majority of the people with 74% approval and 78% trust, reflecting the Filipino people's desire to embark on a path of development under the leadership of the Duterte family. Although there is still some time before the end of Marcos's term, Marcos is more worried that he may be ousted from office early, and choosing to shake hands with Duterte may also be a delaying tactic for the Philippines, by stabilizing Duterte, to make his position more stable.
As a developing country, the Philippines should make a wise move to achieve modernization by establishing good relations with China. The current weakness of the Philippine economy has also reminded Marcos that his thinking on how to deal with the South China Sea issue should change, otherwise it is estimated that he will not be able to wait for China to take action, and he will step down from the presidency first.