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Philippines Walks Out of BRI: What Does It Mean?

China did little on its BRI pledges to Manila but the immediate provocation was its aggressive attacks near the Second Thomas Shoal in the Philippines EEZ.



Philippine President Ferdinand Marcos Jr speaks during a joint press confernce with European Commission President Ursula von der Leyen at the Malacanang Presidential Palace in Manila, Philippines, July 31, 2023. (©)POOL via REUTERS.)

The decision of the Philippines to walk out of the China-led Belt and Road Initiative (BRI) represents a big step forward for the country. Under former President Rodrigo Duterte (2016-2022) it grew very close to China.

The immediate provocation for Manila's decision seems to be the Chinese Coast Guard's deliberate use of "dangerous blocking maneuvers." These caused Chinese vessels to collide with a Philippine resupply boat about 25km from Second Thomas Shoal

It is worth mentioning here that the Second Thomas Shoal lies within the Philippines' 200-mile exclusive economic zone. The country had deliberately run aground its BRP Sierra Madre warship in 1999 to underline its claims in the face of Chinese pressure.

Chinese Coast Guard and maritime militia vessels surround a Philippine Coast Guard patrol boat (center) near Ayungin Reef in the South China Sea. October 4, 2023 (©Philippine Coast Guard photo via Kyodo)

Behind Manila's Decision

So, what are the bigger factors at work here? 

For one, not much has happened on the BRI front since China announced some big-ticket investments in the Philippines. 

Second, the Philippines has borne the brunt of China's belligerence in the maritime arena of the South China Sea. In the past, it was seen as a weak actor.

Third, since President Ferdinand Marcos Jr took office in the Philippines in June 2022, he has put relations with the US back on track. This is something that had taken a hit during the Duterte years. 

The crew of a Chinese Coast Guard vessel removes the cover of a naval gun near Ayungin Reef in the South China Sea, August 2022 (Provided by the Philippine Coast Guard via Kyodo)

Under Duterte, China's relations with the Philippines resembled what has been termed "pledge trap" diplomacy. In other words, Beijing made promises of substantial investment in exchange for concessions in the South China Sea. Manila later realized that most of the promised $24 billion USD in infrastructure projects never came through.

Fourth, the Philippines also seems to have learned from the experience of countries like Sri Lanka and Laos. Those (and other) countries seem to have been caught in a kind of debt trap. They are unable to pay back the huge loans taken from China. 

In addition, there are also countries like Pakistan, Kenya, Zambia, and Mongolia. These countries are now bearing the brunt of soft loans taken from China. In the case of Sri Lanka, the government had to cede control of its Hambantota Port after it failed to repay Chinese loans. 

Prime Minister Fumio Kishida addresses the Philippine Congress. November 4.(©Reuters)

What This Means for India and Japan

A number of Chinese projects are now expected to be put on hold in the Philippines. Among them are the Mindanao Railway Project Tagum-Davao-Digos segment and the Chico River Pump Irrigation Project. There is also the New Centennial Water Source - Kaliwa Dam Project, the Samal Island-Davao City Connector project, and a closed-circuit television project in multiple cities throughout Metro-Manila. 

The Philippines will also now take a re-look at the entire gamut of projects involving China. 


Now is the right time for India and Japan to pitch in with some better initiatives to help nations like the Philippines. During PM Fumio Kishida's recent visit to the Philippines,  he stated that both the Japanese public and private sectors would continue to support President Marcos' "Build Better More" policy. Infrastructure development such as the Dalton Pass East Alignment Alternative Road and the Manila Metro Subway was included in this.  Kishida also spoke to the Philippine Congress, underlining that the relations between the two countries were "stronger than ever."  

Philippines hosted the 42nd ASEAN Multilateral Naval Exercises at Subic Bay, Zambales, Philippines. May 11, 2023. (© REUTERS by Eloisa Lopez)

Options for the Philippines

The Philippines has the option to coordinate its response with countries like Vietnam. It, too, has been at the receiving end of Chinese territorial aggression. 

Definitely, China will see this as an affront and may go all out to punish Manila in different ways. In the past, China has used economic ties as a weapon. Whenever tensions have flared up between China and the Philippines over their territorial dispute in the South China Sea, Beijing has doubled down on banana imports from the Philippines.

For example, an Arbitral Tribunal constituted under the 1982 Law of the Sea Convention delivered a unanimous decision in favor of the Philippines in 2016. The tribunal firmly rejected China's expansive maritime claims in the South China Sea as having no basis in international law. However, then-Philippines President Rodrigo Duterte refused to press its case.

Meanwhile, Washington is bound to come to the rescue of the Philippines as a part of its Treaty Commitments. Those are set forth under Article IV of the 1951 US-Philippines Mutual Defense Treaty. 

Moreover, President Joe Biden has promised to defend the Philippines in the event its security is threatened. He reiterated this recently after another clash by Chinese vessels with Philippines forces. In October, he noted: "I want to be clear — I want to be very clear: The United States' defense commitment to the Philippines is ironclad, [and] the United States defense agreement with the Philippines is ironclad." 

Chinese President Xi Jinping and Russian President Putin wave their hands during a group photo session. They attended the third Belt and Road forum on October 18 at the Great Hall of the People in Beijing. October 18. (©Kyodo)

The Shrinking Belt and Road

It should also be noted that China recently concluded the third Belt and Road Forum for International Cooperation (BRF) in Beijing. There was plenty of pomp and gaiety, although there was much less representation at the Heads of Government level. It clearly reflected the growing lack of interest in the BRI as compared to earlier years. 

Meanwhile, in Europe, Italy has expressed its desire to walk out of the BRI too.

The Philippines' bold move may also provide an opportunity for other ASEAN nations participating in the BRI to rethink their participation. They also risk getting sucked into a kind of a debt trap. 

Manila's decision will also allow it to recalibrate its economic ties with China to a more balanced relationship. National security is paramount and no nation can afford to ignore the same, including the Philippines.


Author: Dr Rupakjyoti Borah

Dr Rupakjyoti Borah is a Senior Research Fellow at the Japan Forum for Security Studies. The views expressed here are personal.


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