By Perry Diaz
During the 300-year Spanish colonial era, the natives were called “indios” and the Philippine-born Spaniards and mestizos (mixed heritage) were called “Filipinos.”
In 1898, after a brief period of Philippine independence, Spain ceded the Philippine Islands, Puerto Rico and Guam to the United States at the Treaty of Paris for $20 million. The old masters left and the new masters arrived. Consequently, the fallacy that had been going on for more than 300 years was corrected: the natives who had been derogatorily called “indios” became the new “Filipinos.”
The first thing the Americans did was to integrate the new Filipinos into the government patterned after the American civil service. Another was to educate the Filipinos in the language of the colonial masters, which is the exact opposite of the Spaniards who discouraged – nay, banned – the indios from learning Mother Spain’s language. Only the Filipinos (non-natives) and the favored elite were allowed to speak Spanish.
It didn’t take long for the Philippines to progress after gaining its independence on July 4, 1946. In the 1960s, the Philippines was second only to Japan in terms of economic power. When the corrupt Marcos dictatorship took power, the country came to be known as “The Sick Man of Asia.”
Fast-forward to the Duterte era. President Rodrigo Duterte announced that he couldn’t stop corruption in his administration no matter how hard he tried to stop it. He also complained that the trafficking of illegal drugs continue to mercilessly destroy the lives of millions of Filipinos. He was so frustrated that he was thinking of stepping down.
But then came another threat to Philippine sovereignty – the Chinese colonization of the Philippines. Indeed, the threat is three-pronged: influx of Chinese nationals, trafficking of illegal drugs, and debt trap diplomacy.
Influx of Chinese nationals
China’s “One Belt, One Road” (OBOR) expansion into the Philippines has drawn various industries that created new economic opportunities. One of them is offshore gaming known as Philippine Offshore Gaming Operations (POGO), which was established after Duterte took over the government in 2016. There are now more than 50 POGO licensees, many of whom are Chinese groups.
The influx of Chinese gaming companies has created another industry – real estate. Due to the demand for POGO facilities, offices and houses of the Chinese nationals, property values have skyrocketed. The growth is phenomenal. POGO companies employ mostly Chinese nationals that deprive Filipinos of much-needed jobs. Their flimsy reason is they speak Mandarin, which is what the Chinese gamblers from China speak.
Indeed, the influx of Chinese nationals to the Philippines has taken a quantum leap. As a group that’s known for not assimilating with the general population, the Chinese would build in no time hundreds of ethnocentric communities – mega-Chinatowns — that would control the economic activities in major population centers.
Trafficking of illegal drugs
The illegal drug operation involves various players, to wit: Foreign drug manufacturers, smugglers, corrupt government officials, shabu laboratories, drug lords, corrupt Customs officials, corrupt PDEA officials, corrupt police officers, drug pushers, and drug users. It’s a hierarchy where all the players play a part in the distribution network that has turned the Philippines into a country of drug-induced zombies. It’s destroying the country!
The drug problem started at the top of the food chain – the drug manufacturers that are based in China. The Philippines has become the major distribution hub because of the corruption in every level of the government structure. Corrupt government and local officials protect the smugglers, shabu laboratories, and drug lords, who in turn bribe the corrupt Customs, PDEA, and police officers.
Debt trap diplomacy
Studies show that the Philippines is very vulnerable to “debt trap” because of China’s high interest rates. Compared to Japan’s interest rates that range between 0.25% and 0.75%, Chinese loans come with an interest rate of 2% to 3%, which is 12 times higher than those from Japan. Yet, the Philippines and other poor and underdeveloped countries would take Chinese loans only because they’re part of the OBOR packaged deal. It’s a trend called “debt trap diplomacy,” a new form of neo-colonialism.
In his attempt to improve and modernize the country’s economy, President Duterte is seeking more loans for the country’s infrastructure buildup in the next four years totaling a whooping P8 trillions ($150 billion). Since infrastructure projects don’t generate revenue directly, the country could fall victim to China’s “debt trap diplomacy.” Indeed, falling into a debt trap could lead to Filipinos’ subservience to China – second-class citizens in their own country, just like it was during the Spanish colonial period.
China’s ambitious trillion-dollar OBOR project has attracted 70 countries in Asia, Oceania, Africa, and Europe with railway lines and shipping lanes. However, to fund OBOR, China offers high-interest loans to poor and developing countries, which makes one wonder: What happens when these countries are unable to pay their loans? Well, it’s just like having a house or a car that you can’t afford to pay the loans; the lender would either foreclose your home or repossess your car. In the case of OBOR projects, Chinese loans use natural resources and assets as collaterals that she could take possession of if a country defaults on her payments.
To date, eight countries are vulnerable to debt traps: Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan, and Tajikistan. One country, Sri Langka, had fallen into a debt trap already; she had defaulted on her more than $1 trillion debt to China. Recently, she handed over the Port of Hambantota and other projects to several Chinese state-owned companies. Another one is Djibouti, which ceded control of a key port to a Chinese-linked company. Djibouti is strategically located at the strategic Strait of Bab-el-Mandeb at the mouth of the Red Sea, an inportant sea-lane that connects to the Suez Canal.
It’s important to note that China has a preference for taking over shipping ports that are along the OBOR sea routes that would bring goods – particularly oil and gas — from as far as Africa and the Persian Gulf through the strategic Strait of Malacca all the way to China. With China controlling shipping ports along the OBOR sea routes, which are often referred to as China’s “string of pearls,” China’s domination of the sea-lanes is assured.
In regard to the Philippines, with China’s high interest rates, the current government’s debt of approximately $123 billion could rise to over $1 trillion in 10 years. Given the humongous loans that the country gets from China, what’s the likelihood of China taking possession of Philippine assets if she defaults on her loans? There are lucrative assets that China could take over such as the oil-rich Recto Bank, Benham Rise, Malampaya gas field, Clark and Subic Bay Freeport Zones, Port of Manila, Port of Cebu, mining companies, and others.
Indeed, with the influx of Chinese nationals, trafficking of illegal drug from China, and the likelihood of defaulting on her Chinese loans is pretty high. With her geostrategic location in the South China Sea, where $5-trillion worth of goods pass through each year, it makes the Philippines a high-value target for China’s imperialistic expansion.
If China establishes herself as the neo-colonial master of the Philippines, the Filipinos would then become the new “indios” and the Chinese colonizers would be the new “Filipinos.” Does that sound like it would be the Spanish colonial era except that the Chinese would take the place of the Spanish colonial masters? Is this history repeating itself? The question is: Is it inevitable or could it be prevented?
(DISCLAIMER: The views and opinions expressed in the columns are those of the authors and do not necessarily reflect the view of The Philippine Business and News)