Potential friendlier ties between Manila and Beijing are expected to benefit the country, especially in terms of infrastructure opportunities, as Chinese construction firms and financing options become available to the Philippines.
Although the full extent of the investment deals may be “muted” by underlying political tensions, global think tank BMI Research said in a report that increase Chinese involvement in Philippine infrastructure will help close funding gaps in the Duterte administration’s “infrastructure-spending ambitions.”
President Duterte and his economic team have been vocal about ramping up infrastructure spending to address gaps and issues that could dampen sentiment and the long-term investability of the country.
In his recent pronouncements, the President has made it evident that he wants closer ties between the Philippines and China.
The President is now in China for a four-day state visit.
The think tank also said closer bilateral relations will benefit both the Philippines and China.
“China sees befriending the Philippines as a way of reducing American influence in Asia; while the Philippines seeks to gain access to China’s generous infrastructure investment packages, which peers in Southeast Asia are already benefitting from,” the report read.
However, BMI Research said the downside risks to their outlook for the country attracting greater investment from China arise from “near-term political uncertainty.”
“Although Mr. Duterte has taken a less confrontational approach to the South China Sea dispute, there is the risk his position could change in future given his unorthodox political style and populist politics, which would then place into question any China-backed infrastructure projects in the pipeline,” the report read.
source: Business Mirror
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