Sea dispute with China an economic threat to next government, say experts

MANILA, Philippines - The West Philippine Sea dispute poses not only security issues but also a serious economic threat that the next administration needs to handle carefully, according to experts.

Experts said the 6.7-percent plunge of the Philippine Stock Exchange index (PSEi) on Aug. 24 following the collapse of the Shanghai composite index has revealed the bigger economic issues at play in the ongoing West Philippine Sea dispute.

“We have to manage the dispute with respect to continuing business relations,” said Francisco del Rosario, president of the Management Association of the Philippines.

“We cannot completely shut out China from the economic landscape. Instead, we need to improve our relations with them by initiating trade and investment missions, dialogues, and conferences. Currently, there’s almost nothing that’s happening,” he said.

Speaking at the Stratbase Albert Del Rosario (ADR) Institute National Security Forum, Del Rosario said China has emerged as one of the biggest markets for the Philippines, accounting for 11.4 percent of the country’s exports, valued at $6.4 billion.

“Globally, they’re the current top source of tourists, but only fourth in the Philippines because of this ongoing dispute,” he said.

Dindo Manhit, managing director of the Stratbase Group and president of the ADR Institute (ADRI), said the ongoing territorial dispute in the West Philippine Sea has drawn attention to the government’s slow implementation of the Armed Forces of the Philippines’ modernization and will be a strategic issue that should be carefully addressed by the next government and the Association of Southeast Asia Nations as a group.

Ananda Almase, a professor at the National Defense College of the Philippines, said the country’s National Security Policy should provide a clear definition of goals that should guide the formulation of strategy and that “the policy guidelines issued by the President does not have the military element that fills out our capability for deterrence and defense.”

Dr. Renato de Castro, ADRI convenor and professor of international studies at the De La Salle University, said the involvement of the United States and Japan in the ongoing territorial row would further complicate and prolong the issue.

“This is making China more belligerent and more uncompromising, so it will be a concern for the successor to President Aquino. The challenge for the next administration is to continue the challenge against China’s expansion,” De Castro said.

The territorial issue is further complicated with the increasingly unified and cohesive stand of Asean and its ongoing integration efforts, even though in the past it had very little success in dispute settlements and conflict resolution mechanisms, said former senator and National Defense Secretary Orlando Mercado.

“A shared-sovereignty approach might be the way to go. We know it’s not going to be an easy process. Asean must break existing trade-offs in governance with new decision-making models and mechanisms. I think what Asean needs is some disruptive innovation; some people should disrupt Asean a little more and make them come at realities of the day,” he said.