Illegal workers are just the beginning: Duterte’s pivot to China is not having the desired effect

Photo Credit: Wikimedia Commons

Despite making extensive concessions to Beijing, the Philippines has not received much in return. What looked like an appealing marriage, has become an abusive relationship.


Following a recent Senate inquiry which exposed an influx of foreign Chinese workers working illegally in the Philippines, President Rodrigo Duterte was quick to advise caution. The Filipino president warned against a potential crackdown on illegal Chinese workers.

“Yes, they should be deported”, he said, “but in the same manner, you should be careful because when you point to the Chinese you also point yourself at us”. Duterte was referring to the extensive presence of Filipino workers working illegally in China.

On the face of it, his comments seemed strange. They appeared to prioritise the plight of a small number of international Filipinos who entered a foreign labour market illegally over very real domestic labour concerns.

The Department of Foreign Affairs estimates there are only around 13,000 Filipino workers in mainland China as of 2017, a fraction of the estimated 400,000 Chinese workers working in the Philippines.

The comments are even more bizarre given that just several weeks previously, reports emerged that the Blas Ople Center has received numerous requests for assistance from overseas Filipino workers (OFWs) that are being exploited. Many report being abandoned by recruiters after being conned and forced to work for Chinese employers without contracts.

Duterte’s Chinese links are not having the desired effect

Duterte’s comments are emblematic of the results his pivot towards China. He advised against a crackdown of Chinese workers, undoubtedly to appease Beijing, but is getting little in return, not even protections for Filipino workers in China that face arrest and exploitation.

This “give a lot, get a little” result has been prominent in Duterte’s pivot to China. Under his tenure, the Philippines has heaped praises on Xi Jinping and the Chinese leadership, avoided all mention of the Hague ruling that ruled in favour of the Philippines in the South China Sea dispute, ended military exercises with the US, and allowed Chines planes and ships to refuel on Filipino soil.

But in return, Chinese concessions have been limited. Two years ago, Duterte left Beijing after a visit with Xi Jinping with a goodie-bag of US$24 billion worth of Chinese loans and investment pledges, but almost none of this has materialised.

Chinese investment to the Philippines has expanded by a paltry 0.4% since 2016. Compare this to the 18.3% investment increase the Philippines received from Japan and South Korea, for which Duterte did not have to make extensive military and territorial concessions.

China’s share of new capital investments in the Philippines was also meagre. In 2017, the country contributed 0.9% towards the Philippines’ net equity capital. Singapore contributed 20.9%, the USA 14.4% and Japan 1.7%.

Trade between the two countries has also seen underwhelming growth figures. Between 2017 and 2018, Sino-Filipino trade increased by 34% to US$940 million. Vietnam, Singapore, Malaysia, and Thailand all record a larger trade volume with China.

Instead of investment, the Philippines has only received a steady stream of Chinese workers

While trading volume and investment has been slow to pick up, Chinese arrivals to the Philippines, both as tourists and workers, has soared.

Between 2016 and 2018, the Philippines witnessed an influx of tourist arrivals from China. The increased tourist revenue will be welcomed, although not what Duterte had in mind when he embarked on his pivot to China.

Source: The Diplomat

Alongside this surge in tourist arrivals has been a marked increase in Chinese workers arriving in the Philippines. Between 2015 and 2016, the number of legal workers entering the Philippines from China spiked by 108%. Between 2015 and 2017, the Department of Labour and Employment (DOLE) estimated around 51,000 work permits were issued to Chinese nationals.

But this legal migration is just the tip of the iceberg. Some estimates believe the true number of Chinese migrants working in the Philippines to be almost ten times higher.

Aside from the strain this is putting on the domestic labour market, and the concerns this undocumented migration raises for national security, the surge in Chinese workers is having a considerable effect on property prices.

Neighbourhoods favoured by Manila’s Chinese inhabitants are seeing property prices rocket. The bay area saw prices jump 27.3% at the end of 2017, while Quezon City reported a price increase of 7.5%. Taguig and Makati saw more modest growth at 5.7% and 5% respectively.

Developers and contractors are welcoming the boon. However, it could leave the property market vulnerable to collapse. As Malaysia found out last year, relying on Chinese buyers means that if Beijing imposes controls over investment in overseas property, the property market collapses, and the areas turn into ghost towns.

Beyond creating vulnerabilities in the market, the surge in Chinese migration has left many low-to-middle income Filipinos priced out of the metropolitan Manila real estate market. Filipino ownership of prime real estate is falling, and many native Filipinos are moving further towards the outskirts in search of affordable property.

Duterte has to weigh up the relationship

Like all relationships, Duterte will know he has to take the rough with the smooth. A successful marriage is built on compromise, effective communication, and giving as well as taking.

However, the Jinping-Duterte marriage is beginning to look more like an abusive relationship. The initial investment promises included in the vows did not translate into meaningful action after both parties left the altar.  Duterte has been forced to take in 400,000 of the in-laws’ family but their undocumented status means they are not paying their way or contributing to the household earnings.

As with any tumultuous relationship, none of this happens in isolation. Duterte does have another option. There is a spurned lover who might just be interested in rekindling an old flame. If Xi doesn’t give Duterte his happily-ever-after, there is a man in Washington that might.