MANILA, Philippines - China’s incursion in Panatag (Scarborough) Shoal as well as its growing aggressiveness in asserting its claims in the West Philippine Sea are likely to make a dent on the Philippine economy, as uncertainties are expected to slow down investments and push up interest rates.
Socioeconomic Planning Secretary Cayetano Paderanga made the observation during the launching of the book “Role of Key Emerging Economies – ASEAN, the People’s Republic of China, and India” by the Asian Development Bank Institute (ADBI) on Wednesday.
The launching was on the sidelines of the 45th annual meeting of the ADB Board of Governors in Manila.
But Paderanga, who is also director general of the National Economic and Development Authority, voiced confidence the issue would be resolved peacefully.
“I am optimistic that this could be resolved. There is a spirit of cooperation in the region,” he said.
The NEDA chief announced Wednesday that the country’s gross domestic product (GDP) had likely expanded by 5.5 percent in the first quarter of the year on the back of higher government spending, from 4.6 percent in the same quarter last year.
The Cabinet-level Development Budget Coordination Committee (DBCC) sees the country’s GDP expanding between five percent and six percent this year after slackening to 3.7 percent last year from 7.6 percent in 2010 due to weak global demand and cautious spending by the government.
Chinese professor Yu Yongding also expressed belief the standoff in Panatag Shoal would stall Philippine growth. Like Paderanga, he was also optimistic that the issue would be settled peacefully.
“I believe the leaders and the people are wise enough to find a way to calm things down,” Yu, a professor at the Chinese Academy for Social Sciences, said.
The standoff began on April 10 when Chinese vessels prevented the crew of Philippine Navy ship BRP Gregorio del Pilar from arresting Chinese poachers on eight fishing boats held two days earlier for harvesting endangered corals, giant claims and live sharks. The poachers eventually were able to sail out of the shoal with their illegal catch.
Panatag Shoal, originally called Bajo de Masinloc, is only 124 nautical miles from Zambales.
China bases its claim on ancient maps and text.
China has rejected a Philippine invitation to bring the dispute before the International Tribunal on the Law of the Sea (ITLOS). It even called on the Philippines not to draw other countries into the territorial dispute.