Philippine Foreign Policy and Domestic Perception to China

Chapter III. Case Study 1: Macapagal-Arroyo Administration (2001-2010)

This chapter focuses on the Philippine-China relation during the Macapagal Arroyo period. It is consists of three sections. The first section discusses the Philippine Foreign Policy and domestic perception to China from 2000-2001 followed by China’s relationship to the Philippines as well as its domestic perspective to the Philippines in the same period. The third section contains the humanitarian aid donation of China to the Philippines ended with a chapter conclusion.

3.1. Philippine Foreign Policy and Domestic Perception to China

Macapagal-Arroyo was the vice president during the Erap administration (June 1998- January 2001) which was cut short due to the people power movement motivated by illegal gambling activities of Joseph Estrada. The Erap administration conducted Bilateral talks between the Philippines and China because of Chinese occupation in the Mischief reef in 1995 (Baveria, 2000). This resulted to the two parties agreeing to resolve the matter peacefully via confidence-building measures, non-usage of force and compliance with the principles of international law which led to an increase in the number of official state visits between the two countries and part of it was the state visit of president Estrada to China in 2000 (Baker, 2004) during which both countries agreed to promote peace and stability in the South China Sea (SCS) and agreed on a framework for Chinese-Philippine relations in the 21st century covering science and technology, culture, agriculture, and business relations (Medeiros et. al, 2008)

When Macapagal-Arroyo came into power in 2001, the Philippine economy was not progressive compared with the previous year. Peso remained weak, poverty rate was high, economic growth was at low, electronic production slowed, banking system was weak, and huge budget deficit (Labrador, 2002) and total trade deficit was at $907 million according to the Philippine Statistics Authority of PSA (2001). The US still remained as the top trading partner with 23.6% (PSA, 2001) followed by Japan, Singapore and Taiwan. China ranked only ninth as a trading partner within the Asia Pacific Economic Partnership Cooperation (APEC) trading block. Furthermore, Philippine Gross Domestic Product (GDP) rate was at 2.8% (World Bank, n.d.).

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In that same year, the Philippines revived its relations with the US at the height of the September 11 terrorist attack via Arroyo being the first Asian leader to support the fight against terrorism.

This led her to earn military and economic support from Washington (Labrador, 2002). Strong ties of the Philippines with the US continued which led to US dominating the Philippines foreign policy in 2003 via support of Arroyo on US’s war in Iraq (Montesano, 2004).

By 2004, GDP was at 6.6% (Worldbank, n.d.) while total trade $83.720 Billion (PSA, 2004).

Japan became the top trading partner at 18.7% of the country’s total trade and US at second place. China became the top four trading of the Philippines in terms of exports at 6.7. % (PSA, 2004). However, in that same year, according to Robles (2004), Macapagal-Arroyo used her

“China card” to gain diplomatic leverage against the United States when the Philippines withdrew its humanitarian mission in Iraq to comply with the demand of a terrorist group who abducted a Filipino truck driver. The Americans were against the decision for they believe that it promotes kidnapping. Consequently, the Philippine-US bilateral security relations were

jeopardize (Robles, 2004). After a few weeks, Arroyo had a state visit to China where she and Premier Wen Jia-bao discussed defense cooperation in rescue, disaster mitigation and exchange of training (De Castro, 2016).

Morada (n.d.) assumes that the warming of relations of the two countries is because Arroyo wanted to depend less with the US military, China wanted to expand its defense ties with the Philippine military and push joint scientific exploration of the South China Sea; and to improve Association of South East Asian Nations (ASEAN) China relations in the context of ASEAN Plus Three and the East Asia Community building projects. On the other hand, Baveria (2000) believes that Arroyo was driven by the promotion of economic and development cooperation with China. Furthermore, President Gloria Arroyo based her foreign policy according to the eight realities of Philippine foreign which helps reinforce the three pillars of Philippine Foreign Policy.

The first reality being as “the dynamics of relations between China, Japan and the United States determine the security situation and economic evolution of East Asia.” (DFA, n.d.).

The strengthening of the Philippines and China relations resulted to high-level exchange visits such as Arroyo’s almost yearly state visit to China since 2004 and state visit of President Hu to

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the Philippines in 2005 wherein he signed 10 intergovernmental agreements and for business-to-business agreements of investments, grants, and loans to finance infrastructure and other

development projects in the Philippines. Hu then invited Arroyo to work closely with China to increase trade, agriculture, defense cooperation and many more (Robles, 2004). Furthermore, bilateral trade between the two countries increased by 41% from 2001-2009 (Robles, 2004). This increase in trade made China the third largest trading partner after the United States and Japan.

Aside from trade, China invested mostly in agricultural and mining in the Philippines (De Castro, 2016).

In terms of the South China Sea dispute, the Arroyo administration agreed with Beijing to conduct a joint seismic survey in the area. President Arroyo declared that the issue is an area of cooperation rather than a potential conflict. She then adopted the Regional Code of Conduct in the South China Sea where it prevents of conflict and establishment of peaceful resolution among claimant states. However, the Joint Seismic Marine Undertaking (JSMU) execution were flawed for one-sixth of survey area are within Philippine boundaries and data was solely

managed by China National Offshore Oil Corporation (CNOOC), which was not fully shared with the Philippines and Vietnam (Mais, n.d.).

According to Schofield & Storey (2009), critics labeled the JMSU unconstitutional and is an exchange for the concessional loans infrastructure projects from China. The Philippine

responded by its legislation updating its baseline claims which resulted to strained relationship with China. Arroyo was criticized domestically. Thus, she distanced her administration from the issue (Schofield & Storey, 2009).

In terms of domestic perception to China, according to the Philippine Social Weather Station (SWS) survey and as shown in Table 3.1 below, Filipinos had a negative trust in China in 2005, 2008 and 2009 while positive trust in 2002, 2007 and 2010.

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Table 3.1: Awareness and Net Trust Rating of China September 2002- June 2010

Month Year Net Trust

Source: Social Weather Station (2018) retrieved

from:https://www.sws.org.ph/swsmain/artcldisppage/?artcsyscode=ART-20180714202446 accessed on June 13, 2019

Macapagal-Arroyo administration started with a balance foreign policy between US and China and ended with the golden age of Philippine-China bilateral relationship during her second term which had produced more than 60 (Morada, n.d.) bilateral agreements with China that varied from political, defense, agriculture, economics, sports, media, youth, scientific, tourism , infrastructure, consular and many more.