A Rebuttal to Joe America

Joeam is correct in his opening statement in one article he recently wrote.

The rest is a collection of personal observations with some very important facts deliberately and seriously omitted.

A FEW REBUTTALS

Then Pres. Aquino thanked China for funding the second phase of this P5.2 billion La Mesa project called the Angat Water Utilization and Aqueduct Improvement of the MWSS through a preferential buyer credit loan agreement with the Export-Import Bank of China.


It was In July 2012, and then President Benigno Aquino and then Chinese Ambassador Ma Kequing led the groundbreaking of a La Mesa Dam project in Lagro, Quezon City.

China proceeded with the project that would improve on the system of bringing water to 15 million Metro Manila residents even at a time when Aquino and China were already at loggerheads over the South China Sea.

Nobody then said that Aquino was entering a Chinese debt trap.

The Chinese consulate in Davao was only inaugurated in October 2018.  China gave it prominence when China's Foreign Minister, Wang Yi, arrived in Davao to lead the inauguration.

Only Joeam is making this into a big deal.  He omitted that other countries have established long-time consulates there as well - Austria, Czech Republic, Denmark, Germany, Indonesia, Japan, Malaysia, Mexico, Palau, Spain and Timor Leste.  Papua New Guinea even has a consulate in General Santos City.

This is classic "Imperial Manila" mentality.

Joeam has called several Filipinos as Chinese agents.  Name-calling is always a poor strategy in any debate.

He asserted that we are gifting fish and sea to China, jobs to China, etc.

These are against facts.  It was during Benigno Aquino’s time that our fishermen could no longer fish in Panatag.  Now, we can under Duterte.

Again, the last time we lost a territory was under Aquino during the Panatag stand-off.  Duterte has not given-up a single island, shoal or territory under his watch.

As to jobs, both China and the Philippines have agreed that illegal Chinese workers should be deported.  That's a period right there.

The critics should just report violations, identify construction sites, take pictures and let the government file a case of deportation and then make a PR stunt out of it.  That would give them credibility.

For online Chinese gambling, only Mandarin-literate Filipinos are qualified here and we are in short supply.

Marigondon, Lapu-Lapu City, near JPark, has become a virtual Korea.  Many signboards are in Korean but nobody is raising a howl.

Long before Duterte took over the presidency in 2016, there was already an influx of GI’s.  GI’s (Genuine Intsik), are the newly-arrived ones as compared to the old established local Chinese community.

It was at the turn of the millenia when Colon and Carbon in Cebu started teeming with GI’s.  168 Shopping Mall in Divisoria was populated by GI’s long before Duterte came to power.  Nobody raised a howl.

Joeam asserted that we are an unaware frog in boiling water- that we are a blind cabbage slowly peeled by China.

By the time Duterte steps down in 2022, loans from China are estimated to be only 4.5% of the nation’s total foreign obligation.  Using his analogy, we, as a collective “cabbage” will only be peeled 4.5% of our leaves and that is if we default.

Financing of the Binondo-Intramuros Bridge, which is 3/4 of a kilometer long and the Estrella-Pantaleon Bridge connecting Makati and Mandaluyong are under Chinese grants at ZERO COST to the Philippines.  The bridges are constructed for FREE as a goodwill measure by China.

Joeam should know that NEDA studies each project, measures, compares and projects the economic benefits against the cost of borrowing.  Only when the minimum threshhold is achieved is a project given a go-signal.

DUTERTE’S ECONOMIC DIRECTION

Duterte started in 2016.  By 2018, our debt to GDP ratio was down to 42%.

This is an achievement considering that the average ratio from 1990 to 2018 was 56%.  This means that even as our debt is growing, our economy is growing at a much faster under Duterte.

By the end of Duterte’s term, the Department of Finance is looking at a ratio between 35% to 39%.

This means that every year that Duterte is in power, which is until 2022, the Philippines ability to pay its debt gets better.

In order to achieve this high growth targets, infrastructure is needed to spur economic activity and increase the GDP.

“Build, Build, Build” faces a massive infrastructure investment gap.

We have used up our lines at our traditional sources of credit like the World Bank and the IMF.

The government has been busy soliciting fresh funds and China, Japan and South Korea have responded.  Even ADB has expressed interest to finance some of the projects.

The U.S. now doesn’t want to be left behind.

Unknown to many, in December 2018, the Trump administration approved the Better Utilization of Investment Leading to Development (BUILD) Act and created the United States International Development Finance Corporation (USIDFC) to lend to low or lower-middle income countries.

This coming April, Finance Secretary Carlos Dominguez will be in the U.S. to present a menu of projects still available for funding by the USIDFC.

Early in Duterte’s presidency, the same economic team presented its full set of projects in China and then in Japan.  Now, it is America’s turn to take its pick.

Duterte’s administration is pragmatic.  It moves in the direction of its interests- “son of a whore” or not.

HOW CHINA WAS ABLE TO POSITION EARLY

To address Joeam on why China is prominent early on in Duterte’s administration, it is important to understand two underlying contexts:

First:  Setting aside Purchasing Power Parity (PPP), even if America make up only 4.4% of world population, they consume 30% of the monetary value of  the world’s total goods and services.  For nominal dollar or dollar equivalent that is being sold and paid for, 30 cents is being consumed inside America.  The balance of 70 cents is divided and bought by the rest of the remaining 194 countries.  It's nominal GDP is 24%, or 1/4 of the world's total.

Second:  China dominates manufacturing in the world: 90% of all computer hardware, personal computers and laptops, 80% of air conditioners, 80% of all bulbs, 70% of all solar cells, 70% of mobile phones, 63% of shoes, 60% of cement, 50% of pork, 48% of coal, 45% of shipbuilding, 90% of rail tunnel-boring machines and so on and so forth.

Currently, America is a consumption-driven economy while China is a production-driven economy.

In 2018, America bought $323 billion worth more goods from China than what China bought from America.  This is because most U.S. manufacturing firms outsource in low-wage countries so they can earn more profits when they sell it back in the U.S.

Examples are Apple's assemblers Foxconn and Samsung in China and GM, Ford and Chrysler in Mexico.

America is a valued customer of China because together with its big population, it has one of the highest purchasing power meaning you can price your items higher if you sell to America than if you sell the same product to the Philippines.

This explains why Apple, which only makes 12% of the world’s mobile phones, takes in about 90% of the mobile phone profits worldwide thus making it probably one of the the biggest, if not, the biggest company in America.

There is no way that America and China can live independent of each other anytime soon.  China and Japan holds more than one-third of America's sovereign debt in the form of treasury bills.

In April 2018, Trump ordered a ban on sales of American parts and software to ZTE - one of the biggest Chinese IT firms, for dealing with Iran and North Korea.

Instantly, ZTE found itself at the brink of bankruptcy.

After negotiations, ZTE agreed to pay a penalty of $1 billion to the American government, deposit a $400 million escrow in an American bank, overhaul its leadership and allow American inspectors in its factories for a period of ten years.

It is how intertwined the economies of America and China are.

America however can flex its muscle more because its purchases is a major vein in China's lifeblood.

It's complicated.

A full-blown trade war cannot be done without inflicting substantial damage to each other's economy. 

Even as China dominates manufacturing, America is its major and irreplaceable customer.

And there lies the problem.

In 2012, Obama started his “Pivot to Asia” primarily to curtail China militarily and diplomatically.  He moved 2,500 troops to Australia from the Middle East even if there was no clear and present danger in the Asia Pacific.

He was looking forward to a friction for control over the oil-rich South China Sea.  Had the policies of Aquino been adopted by Duterte, the plans of Obama would have come to fruition.  Aquino was a pawn.

Xi Jinping response was not military.  He had a good read of what countries want and in the following year, he initiated the Belt and Road Initiative which would create, develop and enhance domestic markets which would be good for Chinese goods and services.  It would entail building infrastructure for ease in exchanges of goods between countries.

China will fund the construction of major rail, road and sea infrastructure in participant countries.  China will lend its expertise in construction and technology.

With many Asian countries already having stretched their credit facilities with the ADB, the World Bank and IMF, China created the multilateral Asian Infrastructure Investment Bank (AIIB) as a new funding source.

From being a defensive move, the initiative of China presented a window to re-balance world trade in its favor.

In 2016, the US realizing its mistake, added an economic angle to its “Pivot to Asia” by leading the Trans Pacific Partnership (TPP), a free trade agreement that would control Chinese imports in participant countries.  It was too late and too little.  It was scrapped.

Diplomacy is a game of chess.  One false move and the other capitalizes.

China offered carrots.  America offered sticks.

Duterte, an outsider, was severely under-estimated early on.

Upon his election and before his proclamation, Chinese Ambasador Zhao Jianhua saw an opening.

He visited Duterte in Davao three times in a span of two months and the last two were not merely courtesy calls but were already working meetings.

In contrast, then US Ambassador Philip Goldberg was not among the first well-wishers of Duterte in Davao.  Even if he met Duterte one-on-one, his Davao trip was together with the ambassadors of U.K. and Germany.

Duterte already had beef with America when CIA agents fooled the guards and whisked Michael Meiring out of a hospital in Davao and spirited him out of the country in a private plane even if he was facing unlawful possession of explosives and damage to property.  There was no explanation nor apology by and from the U.S.

Australia and the US drew first blood in April 2016, just before the May elections.  Their ambassadors openly denounced his rape joke which tantamount to foreign interference in a sovereign election.  For this, Goldberg was called ‘gay” by Duterte.

In September 2016 during the ASEAN Summit in Vientienne, Laos, Obama called out Duterte publicly in a press conference on his violent drug war.

Duterte was angry.  He made his trademark curse, "putang ina!"

But he did not say that Obama was the son of a whore.  The English equivalent of his statement is "son of a bitch," a common American expression.  Although they all mean the same, media made a slant on the exact translation to paint further distaste for Duterte.

The US had two strikes against Duterte in a span of five months.

Duterte was humiliated.

No foreigner can do it to a head of state in front of his countrymen and in front of his peers in ASEAN.

Even then, Duterte tried to ask help from America for the purchase of 26,000 rifles for the PNP but US Senator Ben Cardin vowed to block the purchase.

He tried to purchase 16 units Bell 412 helicopters from Canada but Trudeau imposed conditions.

When he explored acquiring submarines from Russia, South Korea, Germany and France, US Assistant Secretary of Defense for Asian and Pacific Affairs Randall Schriver told him not to leading him to question, “You want us to remain backward?”

Duterte is a statesman but not on the surface.

On his first trip to Hongkong, he apologized for the Manila Hostage Crisis which the former President Benigno Aquino refused to do even after he stepped down.

Duterte was running even before he hit the ground.

Prior to his inauguration, he sent emissaries to Jose Maria Sison in the Netherlands and organized a business workshop in Davao.  He met with Nur Misuari and the MILF leaders.  He even shook the hands of Leila de Lima during his first State of the Nation address but de Lima continued to rile against him not knowing her closet was full of skeletons.  He got Gina Lopez to lead the environment department and appointed leftists in his government.

However, there was a concerted effort to oust him from day 1.

Nationwide, the priests used the sermons in their masses to criticize his war on drugs.  Trillanes travelled to the U.S. to meet with Republican Sen. Marco Rubio (of the viral Venezuelan “German Dam” faux pax) who is now actively espousing regime change in Venezuela.  An anti-Duterte Yahoo chat group led by the Loida Nicolas-Lewis was exposed.  Inquirer came out with a kill list.  Pierre Omidyar-funded Rappler and ABS-CBN were unforgiving in their criticism of Duterte.  Matobato and Lascanas were brought to the open.  Sabio filed a case against Duterte in the ICC.

This was reminiscent of what the U.S. did to their NATO ally Turkey and now, to Venezuela.

With his high approval rating and the military squarely behind his back, his opponents now realize that ousting him EJK-style is next to impossible.

He is a good counter-puncher.  The best in his class.

Duterte had a laundry list on what he needed to and must do.  It was China, Russia, Japan and South Korea that immediately responded to his call.  The U.S. and Canada refused to help and gave only criticisms.

THE CHINESE DEBT TRAP

The current narrative in mainstream media is that Japan’s ANNUAL interest rate ranges from 0.25% to 0.75%.  China’s ANNUAL interest rate ranges from 2% to 3%.

True.

But Joeam omits that the ANNUAL interest rates of the IMF, the World Bank and ADB ranges from 3.6% to 4.0% with the World Bank still adding a spread of 0.5% over its borrowing rate.

Many are asking why we don’t get all our loans from Japan when the interest rate is low.

Duterte presented to Japan a menu of projects during his Japan state visit.  Had Japan selected all of Duterte’s projects, then all of our foreign financing problems would have been solved.

But Japan did not.

JICA is a limited Overseas Development Assistance fund by the Japanese government that is allocated all over the world and is approved based on its feasibility.

Here in Cebu, when Japanese factories opened inside the MEPZ in Mactan, JICA financed the first Mactan bridge to facilitate transport of goods between MEPZ and the International Container Port.  When this bridge became traffic-congested, it affected their businesses inside MEPZ.

They then financed the 2^nd Mactan Bridge also known as the Marcelo Fernan bridge.  Now this too is traffic-congested.

JICA has now agreed to finance for a third time a third bridge (fourth actually!) with South Korea agreeing to finance relocation of the International Container Port from Cebu City to Lilo-an town.  

Another Japanese fund, the Overseas Economic Cooperation Fund (OECF), partly financed the South Road Project in Cebu.  To make this project viable, they also financed the tunnel and the viaduct to increase accessibility to the south reclamation project from Cebu and Mandaue.

In all of these, you will see that a project is selected by Japan based their viability and the interests of Japan.  This works for all lenders.

Nobody is calling out World Bank as a debt trap for the mothballed Bataan Nuclear Power Plant which remains to this day, the single biggest foreign debt obligation of the country for which we are still paying until now.  Even if the cost overruns were humongous, we would not be having now one of the highest electricity rates in the Asia had it been given a chance to operate by former president Corazon Aquino.

DENNIS UY AND THE THIRD TELCO

Now this tinge of jealousy on Dennis Uy.

Phoenix Petroleum was already on the rise long before Duterte’s time.

Many have labeled Dennis Uy a crony.  During Marcos time, Marcos forced the owners to sell their companies to a favored friend for below market rates.  As far as we know, Duterte has not forced anybody to sell to Dennis Uy.

Dennis Uy is sticking his neck out here.  These companies were not given to him on silver platters. His spending spree is financed by heavy borrowings.  He took out a $220 million loan from the Bank of China, Ltd.  His domestic debts have ballooned enormously.

His debts have soared and knowing that Duterte will step down in 2022, the risks on the viability and legality of his new acquisitions are his alone.

Now, regarding the new telco, from the start, there were already strong and powerful lobbies against Duterte’s vision.

Former DICT secretary Rodolfo Salalima, a former Globe Telecom executive was pencil-pushing on Duterte’s instructions to get a new telco player.

Salalima had nothing to show in his two years on the job.  He wasted two years of Duterte's six years in office.

He was fired.

He was replaced by Eliseo Rio, Jr. In May 2018.

By June 2018, Duterte warned Rio that the project will be under the Office of the President if nothing is done by October 2018.  That got everything rolling.

Almost every step of the bidding process was broadcast live.  The bid opening itself was highly anticipated, broadcast live and Dennis Uy won.

Senator Grace Poe then advised Rio to award the transfer of frequencies even without the confirmation of the Senate of the House of Representatives' resolution.  Rio declined.

The reason may be is that Duterte is a legal eagle.

Facts will show that Duterte has a winning streak at the Supreme Court (even at a time when he had few appointments) - The Marcos Burial, De Lima’s indictment, Arroyo’s acquittal, Martial Law in Mindanao and its two extensions, Sereno’s Quo Warranto and Trillanes Ab Initio.  Currently his pending case with the Supreme Court is PH’s ICC unilateral withdrawal.

Duterte may have smelled something from Grace Poe’s advise, and that is, a future basis for nullification of the 3^rd Telco award.

If Rio obliged Poe, a future administration may nullify the frequencies that would be given to Dennis Uy.  The next step of the project has to wait until the next congress convenes after the mid-term elections.

Generally, all Filipinos, except the owners of Smart and Globe, are looking forward to a 3^rd Telco, whoever it may be.

BONG GO

It is the president’s prerogative  If there is an election offense committed by Bong Go, someone must file a case first before anything can be done.  The Filipino people have elected lesser individuals before.

HUMAN NATURE

Even siblings go after each other through jealousy.

China and the US are going at it but it boils down to business.  One strategy in business is by putting down competition.

America is a leader in many things but there are sectors where Russia and China are getting an edge.

America still  leads in military hardware exports at 38% of the world market.  Russia comes in second at 21%.

But here are examples where the U.S. is lagging behind.

Before the recent Space X Falcon 9 launch, U.S. astronauts hitchhiked on Russian rockets to the International Space Station.  But still, Elon Musk has praised the Russian RD-180 rocket engine as the best in the world.  He said it would be the best if it is reusable like his.

Russia has unveiled the Zircon missile that travels at 2.7 km. per second.  This is unstoppable by any top-of-the-line defense system currently in the market.

The recent dogfight between India’s outdated MIG-21’s and Pakistan’s F-16 may affect the direction of India’s procurement of 250 brand-new medium fighter aircrafts, 110 units of which are needed in the near-term as it will retire its fleet of MIG-21's and MIG-27's.  Even if America's Lockheed Martin's is a front-runner with their F-16, Russia may still make a coup with their Sukhoi SU-30.  Egypt is acquiring the Sukhoi SU-35's multi-role fighters.

Turkey and India has chosen Russia’s S-400 missile defense system over America’s Patriot missiles.

The Nord Stream 2 is Russia’s 3rd and 4th pipeline project to double the supply of natural gas to Europe.  The first two pipelines were inaugurated in 2011 and 2012.  America is opposing this as it will increase the influence of Russia in Europe.

Russia has access to the world’s largest oil reserves at 300 billion barrels and that is in Venezuela by just being friends with Chavez before and now Maduro.  Now, with Juan Guaido, America is trying to arm twist Venezuela into handing over its oil assets to an America-friendly administration similar to what America did in the Middle East.

China’s Huawei has gained dominance in 5G infrastructure worldwide and its foldable Mate X is simply too advanced for our time.  Germany has indicated it will pursue its 5G infrastructure with Huawei even with U.S. objection.  Also, Huawei has become a strong competitor to America's apple whose growth have become flat and this is a major concern for American economic interest.

China has the largest radio telescope in the world.

America’s ONE AND ONLY high-speed railway is the Acela Express introduced way back in 1969 with a top speed of 150 kph running 708 km. from Boston to Washington D.C.

California’s attempt at a modern high speed rail from San Francisco to Los Angeles is now "dead on its tracks."

Meanwhile, China has unceremoniously built the largest network of high-speed trains in the world with 29,000 km. of tracks running at a maximum of 250 kph for its “D” trains and 350 kph for its “G” trains.

America cannot do this because it will impact the revenues of the airline business and Amtrak whose lobby are very strong in Congress to the detriment of the progress of American transportation.

China has built the longest sea-bridge at 55 km. from Hongkong to Macau.

All the public utility buses in Shenzhen, China are electric and the program to convert taxis is ongoing.

China has landed a spacecraft on the dark side of the moon.

The twin recent Boeing 737 Max crashes may affect future aircraft sales even as China is now testing its Comac C919 and Russia, its MC-21, their foray into commercial jumbo planes, to challenge the duopoly of Boeing and Airbus.  Air Leisure of Egypt is buying the 98-seater regional jet Sukhoi SJ-100 

The major barrier against China in the world is rooted in language.

But now with Facebook, China is trying to connect.

Facebook pages like CHINA XINHUA NEWS and CHINA DAILY are refreshing diversions from the staple of toxic and negative news and intrigues being spewed out by western media and where we are daily barraged about people trying to pull each other down.  Admittedly, even if they are propaganda arms of the Chinese government, they post celebrations and triumphs of humanity in and outside China aside from regular news.

Duterte has always said that he is always being monitored by foreign entities.  He has also said that he gets his intel from foreign entities.

One of the remaining competitive advantages of the U.S. is that it employs the most number of mobile phone and internet snoopers in the world under the NSA through various programs such as PRISM, XKeyscore, FASCIA, Optic Nerve and Dish Fire.

IN CLOSING

Duterte has done the most by any president in the shortest possible time.  During calamities, his government has provided assistance.  The Marikina evacuation center was impressive.

In the several calamities that have passed, we have not heard of fund drives nor requests for donations of old clothes and canned goods by NGOs because the money of government  is now being used efficiently.  Whereas unlike before during every calamity, Fuente Osmena in Cebu was a favorite drop-off point for food items and used clothing. 

Facilities at the Vicente Sotto Memorial Hospital are equal to, if not, exceeds that of local privately-owned hospitals.

He is a man in a hurry to maximize his 6-year term that is why he has fired countless under-performers.  He was decisive in Marawi and no other president would have visited such a war zone five times.

He has taken on the drug syndicates head on.  NO OTHER POLITICIAN will stick his neck out to go against druglords the way he does.  It is a very, very dangerous position.

He has already given his P20 million reward for the Batocabe murder and has called out publicly Congress, twice, to give their promised P30 million reward.

Some of the reforms he has initiated are no-brainers:  10-year Passports, 5-Year LTO licenses and the clean-up of Boracay and Manila Bay.  All are good PR stunts, too!

He may sound misogynistic but he treated Miriam Santiago like a lady and with respect during the presidential debates in Cebu.  All of his Youtube videos on the Cebu Presidential Debates are a must-watch as Duterte showed his funny-side!  The women's penitentiary in Davao is the best in the Philippines and is also on Youtube.

Unlike his rhetoric, he has made some solid contributions to the faith.  He signed Proclamation No. 124 declaring every January as Bible Month.  He has made the Feast of the Immaculate Concepcion, December 8 every year, a non-working holiday.  He has retrieved the Catholic Church's three Balangiga Bells from America.

Talk is wonderful but Duterte needs cash right now.  Out of the eight new foreign loan agreements that have already been signed as of March 2019, only two are with China- P4.37B Chico River Pump Irrigation Project and the P12.2B Kaliwa Dam Project.  The six (6) other big tickets items are with Japan and South Korea.

In April this year, hopefully, the U.S. will agree to fund some of the projects under the Build, Build, Build of Duterte and Joeam will be singing a different tune.

Duterte may be crass and too vulgar.  He may be crude and prude but he is in no way a Chinese agent.  He goes were his country's interest lie.  When the U.S. offered help in Marawi, he accepted it.

Overall, Duterte is pursuing an independent foreign policy - A friend to all, enemy to none.

That is the reason why he is now also trying to untangle from the mutual defense treaty with the U.S. as he said that the Philippines might be forced to defend the U.S. in a war that the country doesn’t want to get involved in.

The Philippines is simply caught in the crossfire between U.S. and Chinese business interests and Joeam's piece is one of the bullets that zinged past our head.