Saturday, December 01, 2012

Vietnam, Myanmar strengthen relations

Vietnam President Truong Tan Sang and his Myanmar counterpart Thein Sein have agreed the necessity of increasing exchanges of delegations at all levels in a bid to strengthen their mutual understanding.

This agreement was reached during talks which form part of Sang's first state visit to the country, at the invitation of the Myanmar president.

Sang expressed his belief that under Thein Sein's leadership, the country would achieve more results during its construction and development process and successfully accomplish its chairmanship role of Asean in 2014, and its hosting duties for the SEA Games next year, contributing to raising the country's status in the region and the world.

Thein Sein said he hoped Vietnam would soon reach its goals set in the socio-economic development strategy during 2011-20.

During their talks, the two sides agreed that they should implement their bilateral co-operation mechanism and regularly review signed agreements to remove all barriers and boost their mutual cooperation.

The two leaders also acknowledged their progress in national defence and security ties as they reviewed agreements made last year and in 2004 about anti-criminal cooperation and defence.

They agreed to soon establish security dialogue at deputy-minister level between the Ministry of Public Security of Vietnam and the Ministry of Home Affairs of Myanmar.

The two presidents also said the two countries should raise their trade turnover to US$500 million in 2015.

Thein Sein promised to create favourable conditions for Vietnam's investment projects in Myanmar.

The leaders also said they would need to improve and extend their cooperation in a very wide variety of fields such as agriculture, forestry, aqua-culture, telecommunications, petroleum, mineral exploitation, transport, labour and culture, and sports and tourism.

They agreed to entrust their relevant agencies to negotiate and sign agreements forming a legal base for more cooperation.

Regarding regional and international issues, the two presidents affirmed they would keep co-ordinating in multilateral forums and support each other in international and regional organisations.

President Sang said Vietnam would always give support for and be willing to share its experiences with Myanmar so the country would succeed in acting as a chair of Asean in 2014.

Regarding East Sea issue, the two leaders agreed related parties should work towards peace, stability, security, safety and freedom and settle disputes by peaceful measures, based on obeying international laws, especially the 1982 United Nations Convention on the Law of the Sea.

They also welcomed the Asean Declaration on Six-Point Principles and the latest Joint Statement of the 15th Asean-China Summit on the 10th anniversary of Declaration on the Conduct of Parties on the East Sea (DOC).

They agreed to strictly implement the DOC and build up a code of conduct in the East Sea.

On the same day, they witnessed the signing ceremony of a Memorandum of Understanding about initiating information exchange about the inspection activities of the State Bank of Vietnam and the Central Bank of Myanmar , and an agreement on petroleum cooperation between Vietnam Oil and Gas Group PetroVietnam and Myanmar's Ministry of Energy.-Asia News Network (November 30, 2012)

No more cheap labour in Indonesia: Yudhoyono

Indonesian President Susilo Bambang Yudhoyono has taken a firm stand amid demands from labour unionists to end the international perception that Indonesia is a haven for investors wanting to tap pools of cheap workers.

On the heels of recent rallies by unionists that often ended in violence, Yudhoyono said on Thursday that the government's stance over labour welfare was in line with the workers' demands.

"It is our moral obligation to fight for it. The era of cheap labour and injustice is now over," said Yudhoyono in a speech before governors, regents, mayors, police chiefs and regional military commanders.

Yudhoyono argued that labour rallies and strikes would stop if businesses were more committed to improving the welfare of their workers.

In the past two months, workers have staged rallies demanding an increase in regional minimum wages by an average of more than 30 per cent for next year, and for companies to be given limits on the amount of contract workers they can hire from third parties under the outsourcing scheme.

The government has bowed to union pressure by introducing a decree that limits the outsourcing scheme. Several local administrations have also agreed to excessively raise next year's minimum wages. The Jakarta administration, for example, has decided to raise the minimum wage by 44 per cent, far higher than the 25 per cent demanded by workers' union.

Apart from supporting better welfare, Yudhoyono also expected workers to end their violent rallies.

"We cannot tolerate violence, sweepings or disturbances in the production process," he said.

"I've always demanded that the police prevent such violence. The police should not let the perpetrators get away with these crimes."

Yudhoyono also urged businesses that fell victim to extortion by officials, an act which may reduce the ability to pay higher worker wages, to send their complaints directly to him via postal box 9946.

In a separate event, Coordinating Economic Minister Hatta Rajasa said that there should be a balanced relationship between firms and their workers.

"We should also take sides with businesses. Companies unable to comply with the minimum wage increases should immediately file a report with the government to demand a wage freeze. We will definitely facilitate them," said Rajasa.

Businesses have voiced concerns that the recent sprawling disputes with workers would send jitters to potential investors and worsen the already high unemployment rate.

According to the Central Statistics Agency, around 41.4 million people, or 35 per cent of the 118 million workforce, are categorised as open or half-unemployed workers.-Asia News Network (December 01, 2012)

Say that again? PH demands China 'clarify' plan to board ships in disputed waters

The Philippines is pressing China to "immediately clarify" its reported plan to interdict ships entering what it deems its territory in the South China Sea, saying Beijing's statement violates international agreements and threatens maritime peace and freedom of navigation.

China's notice, issued Thursday, that it is strengthening control over its maritime jurisdiction in Hainan province and will board ships supposedly intruding in its territory "is a gross violation of the Declaration on the Conduct of Parties in the South China Sea (DoC), international law, particularly UNCLOS, and a direct threat to the entire international community," the Department of Foreign Affairs (DFA) said in a statement on Saturday. "We would like China to immediately clarify its reported plans to interdict ships that enter what it considers its territory in the South China Sea."

Manila is "specifically concerned with the information that foreign vessels illegally entering the waters under the jurisdiction of Hainan Province - which China claims to include virtually the entire South China Sea under the 9-dash line - can be boarded, inspected, detained, confiscated, immobilized and expelled, among other punitive actions," the DFA added.

Such action violates "not only the maritime domain of coastal states established under UNCLOS, but also impedes the fundamental freedom of navigation and lawful commerce," the foreign affairs office said.

The United States says it will protest any threat to freedom of navigation, even as Washington said it would remain "neutral" in the maritime disputes.

China has been embroiled in disputes with ASEAN members Philippines, Vietnam, Brunei and Malaysia, but most especially with the first two countries.

"If media reports are accurate, this planned action by China is illegal and will validate the continuous and repeated pronouncements by the Philippines that China’s claim of indisputable sovereignty over virtually the entire South China Sea is not only an excessive claim but a threat to all countries," said the DFA statement on Saturday.

If media reports are accurate, added Manila, China's announced plan "deserves international condemnation by ASEAN, our international partners and the entire community of nations."

ASEAN Secretary General Surin Pitsuwan on Friday did in fact also express deep concern over China's latest statements and stance, suggesting that the matter could disrupt navigation and dampen investor confidence in the entire East Asia.

China's announcement of its plan in Hainan province stoked the resentment caused by its adoption of an e-passport the design of which includes a map that covers much of the disputed territory not only of the four ASEAN members but also India and Taiwan.

Vietnam and the Philippines are not stamping visas on the new passports of potential Chinese travelers to their countries, but are instead stamping visas on separate documents that are merely given to the visa applicants. The two countries said stamping their official visas on the new microchipped passports might signal assent with China’s new bid to assert its territorial claims.

Coastal border defense our right: China

On Friday, the highlights of a press briefing in Beijing that were posted in their official website quoted Foreign Ministry spokesman Hong Lei as saying it was their “right” to impose such a coastal boarder defense regulation in the South China Sea.

“Every country has the right to carry out maritime management according to law,” Hong said.

“China has indisputable sovereignty over the islands in the South China Sea. The Huangyan island is China's inherent territory and there is no sovereignty dispute over it,” Hong said.

The framework of the COC is the ASEAN’s non-binding Declaration on the Code of Conduct which was signed in 2002.

All signatories to the Declaration are directed to “exercise self-restraint in the conduct of activities that would complicate or escalate disputes and affect peace and stability including, among others, refraining from action of inhabiting on the presently uninhabited islands, reefs, shoals, cays, and other features and to handle their differences in a constructive manner”.

Hong had earlier assured all ASEAN countries that China will “cooperate” with the 10-member-bloc in abiding by the six-principle statement signed by ASEAN and China in the second week of July.

The six-principle statement was put in place after ASEAN failed to issue a joint statement at the last ASEAN Foreign Ministers summit in Cambodia.

Under the six-point-principles, ASEAN agreed to: 1) fully implement the Declaration on the Conduct of Parties in the South China Sea or DOC; 2) support the guidelines of the DOC; 3) conclude early a regional code of conduct on the South China Sea; 4) fully respect universally-recognized principle of international law including the 1982 United Nations Convention on the Law of the Sea; 5) continue exercising self restraint and non-use of force; and 6) the peaceful resolution of conflicts in accordance with universally-recognized principles of international law and including the 1982 UNCLOS.

The revised coastal and border public security regulation is only the latest in a series of aggressive moves by China in asserting its claims over almost the entire rocks and features in the disputed Spratly Island, Paracel islands and Macclesfield Bank in the West Philippine Sea.

In April, Chinese fishermen were caught acquiring endangered maritime species within the 125 nautical miles of the economic exclusive zone of the West Philippine Sea.

Philippine authorities arrested them but China blocked this, sparking a standoff between Beijing and Manila for two months until President Benigno Aquino III ordered the Coast Guard to withdraw Philippines vessels due to bad weather.

China claims virtually the entire West Philippine Sea on the basis of its nine-dash line that can be found on ancient Chinese maps.

The Philippines maintains its sovereignty over the 200-nautical mile EEZ provided by the UNCLOS.-Interaksyon (December 01, 2012 3:59PM)

Vietnam raids 'coin-flipping den'

More than 100 people have been detained in a massive police raid on a gambling den near the Vietnamese city of Hanoi.

Officials say 200 police stormed a guest-house in Bac Ninh province where gambling was taking place over a game involving the flipping of coins.

Officers seized $260,000 (£162,110) from there. One report says police disguised the raid as a wedding party.

Apart from casinos where foreign nationals are allowed to play, gambling is illegal in Vietnam.

Nevertheless, correspondents say that gambling remains popular across the country, particularly when it comes to matches in international football leagues, which are shown on television in Vietnam.

Illegal gambling rings are believed to run operations allowing people to bet with large and small sums of money.

BBC Vietnamese editor, Giang Nguyen, says the amount of money seized is surprisingly large, with media reports describing it as one of the biggest hauls from a gambling raid in recent years.

He adds that the Dinh Bang commune of Bac Ninh, where the arrests took place, is an area that used to be held up by the Communist Party for its revolutionary credentials.

But as market reforms took place in the 1980s, Dinh Bang turned into a centre of counterfeit products and gambling, serving as a base for gamblers from nearby Hanoi.-British Broadcasting Corporation (November 30, 2012 15:20GMT)

Philippine stock market outpaces Asian peers

The Philippine stock market is Asia’s fastest growing so far this year, according to the local bourse.

In a presentation during the 37th Federation of Asean Economic Associations Annual Conference last Friday, Philippine Stock Exchange president Hans Sicat said the PSE composite index (PSEi) has risen by 27.78 percent through November 27, outpacing even China, which was Asia’s fastest-growing economy on growth of 7.7 percent in the third quarter.

However, China’s two main stock indices – the Shanghai composite and Shenzhen composite – contracted 9.4 percent and 11.7 percent, respectively, since the start of the year, Sicat said.

At the close of trading last Thursday, the PSEi registered a new all-time high of 5,640.45, rewriting records a 32nd time this year.

In the July-September period, the Philippines was Asia’s second best-performing economy, but was Asean’s fastest after clocking in growth of 7.1 percent.

Trailing the PSEi was the Stock Exchange of Thailand index, which has risen by 26.5 percent so far this year. The Thai economy grew 3 percent in the third quarter, or less than half the speed of the Philippine economy.

India's NSE Nifty and BSE Sensex were the third and fourth fastest-growing Asian bourses, registering 23.8 percent and 21.9 percent increases, respectively (see table below).


Source: Hans B. Sicat, The Philippines Stock Exchange Inc.: Regional Integration of Financial and Capital Markets in the ASEAN as presented at the 37th FAEA Annual Conference, November 29, 2012 held in PICC, Manila.

Economist Nonoy Oplas, who writes a column for, said the Philippine stock market's ascent indicates that economic growth would reach up to 7 percent in the fourth quarter.

If the country's high-growth track is sustained in the final three months of the year, then this would be the second quarter in a row that actual economic expansion bucks the National Statistical Coordination Board's (NSCB) leading economic indicator (LEI).

The NSCB's LEI pointed to a slide to 0.016 for the fourth quarter from the 0.1312 in the previous three-month period.

The third-quarter LEI also had fallen from the second-quarter figure, failing to anticipate the Philippine economy's strong showing in the July-September period.

The LEI tracks 11 economic indicators, including the PSEi, which has been a positive contributor to the NSCB leading index.-Interaksyon (November 30, 2012 3:53PM)

US questions Chinese plans in disputed seas

The US State Department said it would question the Chinese government about reports Hainan will allow police from the start of 2013 to board foreign vessels that enter disputed areas in the South China Sea “to get a better understanding of what they intend.”

“So until we have a chance to do that, I think we’ll withhold comment given that it’s just press reporting at this stage,” spokeswoman Victoria Nuland said.

China said yesterday that it attached great importance to freedom of navigation in the disputed waters.

“All countries have freedom of navigation in the South China Sea in accordance with international law,” Foreign Ministry spokesman Hong Lei ¥told a daily news briefing.

“China attaches great importance to freedom of navigation in the South China Sea. At present there are no problems in this regard,” Hong said, adding that Beijing hoped to resolve tensions through talks.

Hainan is the province responsible for administering resource-rich islets and atolls in the South China Sea that Beijing claims, putting it on a collision course with the Philippines, Vietnam and other countries who also claim sovereignty over overlapping parts of the sea.

Meanwhile, Nuland said the US has expressed on two occasions its concern to China over a controversial map embossed on all newly issued Chinese passports showing the entire South China Sea and other disputed regions as sovereign Chinese territory.

This was done at a meeting on Wednesday at the State Department with Chinese embassy officials at the Deputy Assistant Secretary level, Nuland said.

Another meeting was held on Thursday with Assistant Secretary Kurt Campbell.

“We’re obviously joining the chorus of countries who are urging the Chinese to reconsider the political signal that this (map) appears to send,” she said.

Nuland said US concerns were not assuaged by the explanations of the embassy officials.

The conservative think tank Heritage Foundation, on the other hand, opposed on Thursday China being invited to participate in RIMPAC (Rim of the Pacific) naval exercises.

It said China’s participation would be deeply problematic as the purpose of the exercise held every two years and hosted by the commander of the US Pacific Fleet is to facilitate interoperability and familiarity among friends and allies.

“For the US, there is a real question about whether we want to display our capacities and that of our allies and partners in front of members of the Chinese navy, at least some of whom, almost certainly, will be seconded from Chinese intelligence,” the think tank said in an article by Dean Cheng and Derek Sissors.

Defense Secretary Leon Panetta extended the invitation for China to participate in RIMPAC 2014 during a visit to Beijing in September.

This year’s RIMPAC exercise, the 23rd in the series, was held in August around Hawaii and involved 22 nations including the Philippines, more than 40 ships and submarines, and more than 200 aircraft, the Defense Department said.

It said the exercise, designed to foster and sustain cooperative relationships critical to ensuring the safety of sea lanes and security on the world’s oceans, was attended by more than 25,000 personnel from Australia, Britain, Canada, Chile, Colombia, France, India, Indonesia, Japan, Malaysia, Mexico, Netherlands, New Zealand, Norway, Peru, Philippines, South Korea, Russia, Singapore, Thailand, Tonga and the United States.-The Philippine star (December 01, 2012 12:00AM)

Friday, November 30, 2012

PH Air Force has 2 new Sokol helicopters

The Philippine Air Force (PAF) received two new helicopters early this week, which is expected to boost its air capability.

In a statement Friday, PAF spokesman Col. Miguel Ernesto Okol said the two Sokol multipurpose helicopters arrived last November 26 at Clark Air Base in Pampanga.

The choppers were airlifted using an Antonov cargo plane from a factory in Poland.

Okol said the helicopters would be used for search and rescue missions. THe aircraft can accommodate two pilots, two crew members, three medical attendants, and six more people.

The helicopters will be turned over to the 505th Search and Rescue Group and will augment the four Sokols delivered earlier this year.

Two more helicopters are expected to be delivered to the Air Force next year.-Interaksyon (November 30, 2012 3:39PM)

ASEAN chief cautions China vs plans to board vessels in disputed waters

China's plan to board and search ships that illegally enter what Beijing considers its territory in the disputed South China Sea is a very serious turn of events, the head of the Association of Southeast Asian Nations said on Friday.

"My reaction is (this is) certainly an escalation of the tension that has already been building. And it is a very serious turn of events," ASEAN Secretary-General Surin Pitsuwan told Reuters in a telephone interview.

"It is extremely important to exercise restraint and to try to approach this development with a level head and be open to listen to concerns of all parties, all sides," he said.

The South China Sea is Asia's biggest potential military trouble spot with several Asian countries claiming sovereignty over waters believed to be rich in oil and gas.

China claims virtually the entire sea. The Philippines, Taiwan, Vietnam, Brunei and Malaysia claim various parts.

The shortest route between the Pacific and Indian Oceans, the South China Sea has some of the world's busiest shipping lanes. More than half the globe's oil tanker traffic passes through it.

New rules, which come into effect on Jan. 1, will allow police in the southern Chinese province of Hainan to board and seize control of foreign ships which "illegally enter" Chinese waters and order them to change course or stop sailing, the official China Daily reported.

"It certainly has increased a level of concern and a level of great anxiety among all parties, particularly parties that would need the access, the passage and the freedom to go through," said Surin, speaking from Thailand.

"The problem is that you can stake the claim, you can initiate measures and policies but there is that potential of misunderstanding, miscalculation that could lead to major tension and major incidents," he said.

The move, if mishandled, could undermine confidence in East Asia as a locomotive of global economic growth, he said, adding that whether or not it was legal depended on the positions of the parties involved.-Interaksyon (November 30, 2012 3:05PM)

Chinese plan to board, search ships a threat to Filipino, Malaysian, Vietnamese fishermen

A Chinese plan to board and search foreign vessels on disputed waters in the West Philippine Sea poses a threat to Filipino, Malaysian, and Vietnamese fishers. 

The mayor of Kalayaan town on Pag-asa Island made these remarks on Friday, expressing concern over the recent announcement by Chinese authorities.  

If true, it poses a threat not only to local fishermen but also to the navies patrolling the area, Mayor Eugenio Bito-onon Jr. told

"Madami madadamay like Malaysia, Vietnam and Filipino fishermen kasi lahat ito may encroachment sa West Philippine Sea at may mga
garrisons/lighthouses. Binibisita pa ng kani-kanilang navies," Bito-onon said.

(Malaysian, Vietnamese, and Flipino fishers will be affected. The navies of their countries also visit garrisons and lighthouses in the areas in the West Philippine Sea.)

China Daily reported that police in Hainan will board and search ships that enter into what China considers as its own waters in the West Philippine Sea (South China Sea).

The rule is said to take effect on January 1.

"If foreign ships or crew members violate regulations, Hainan police have the right to take over the ships or their communication systems, under the revised regulations," the report said.

Fishermen from all over the country pass through West Philippine Sea to fish and Bito-onon called on the Department of Foreign Affairs (DFA) to immediately clarify with China the report.

"Malaking issue at problema ng mundo if they (China) do that. About two-thirds of the world's maritime vessels passes the Palawan passage in the West Philippine Sea," Bito-onon said.

(This will be a huge global problem if China does that.)

He added that China's plan could be an "infringement of freedom of navigation."

Defense Secretary Voltaire Gazmin also expressed concern over China's reported plan.

"Siguro kinakailangang at this point mag-file tayo agad ng diplomatic protest and action on this," Gazmin said Friday.-Interaksyon (November 30, 2012 1:45PM)

Burmese police break up copper mine protest

Police in Burma have used water cannon and tear gas to break up a protest against a vast Chinese-backed copper mine in the north-west of the country.

Protesters said dozens were injured and their camps set alight in Monywa town.

Local farmers, monks and activists have been protesting against what they say are forced evictions to allow for the expansion of the mine, Burma's largest.

Opposition leader Aung San Suu Kyi is in the area to meet protesters and says she wants to mediate a settlement.

Ms Suu Kyi was greeted by supporters who lined the streets.

"I already met one side. I met with mine operators. I want to meet with villagers and protesters," she said. "I want to negotiate after hearing from both sides."

The BBC's Jonathan Head, who recently visited the mine, says this is now being seen as a test case for how Burma's new government will handle growing protests around the country over land grabs that took place under military rule.

The farmers started their protest in June, saying they were forced to accept a deal two years ago under which they gave up their land in return for new housing and financial compensation.

The mine is owned by the military and Chinese arms manufacturer Norinco. The company has said that the deal was voluntary, and that only a small minority of farmers rejected it.

The mine's billion-dollar expansion project covers several thousand hectares of land in Burma's Sagaing region.

Squads of riot police arrived at the camps early in the morning, witnesses say.

"They shot some sort of canisters that caused fire at the camp. We just don't know what sort of weapon it was," Shin Oattama, a Buddhist monk, told Reuters news agency.

"We are now seeking refuge at a nearby village. There's no ambulance, no doctor to take care of the injured."

Of the 22 injured, many are monks, and they are mostly suffering from burns, our correspondent reports. It is not clear what caused the burns, he says.

President Thein Sein's office said in a statement that police had used water cannon, tear gas and smoke bombs to disperse the crowds. A spokesman denied that chemical weapons were used.

Laws on public protests in Burma have been relaxed amid a series of democratic reforms. But this week the government gave the protesters an ultimatum to leave the site.

Meanwhile, China has defended its joint mining project with Burma.

"The relocation, compensation, environmental protection and other issues involved with this project were jointly settled through negotiations by the Chinese and Myanmar [Burma] sides and meet Myanmar's laws and regulations," Foreign Ministry spokesman Hong Lei said during a regular press briefing in Beijing.

"We hope all levels of Myanmar society can provide an environment beneficial to the project's development."

In an editorial published on Thursday, the state-run Chinese newspaper Global Times said that halting the project would be a "lose-lose situation" for both countries.

"Only third parties, including some Western forces, will be glad to see this result," it said.-British Broadcasting Corporation (November 29, 2012 18:10GMT)

China mulling participation in US-hosted Pacific military drills

China's Defense Ministry said on Thursday it was considering a US invitation to attend military drills in the Pacific, in what would be a rare case of cooperation between the countries that share deep military suspicions.

Asked to confirm if US Navy Secretary Ray Mabus, recently in Beijing, had invited China to attend the US-hosted multi-nation Rimpac maritime exercises, Defense Ministry spokesman Geng Yansheng said that was the case.

"The Chinese side thanks the US side for the invite, and will give it positive consideration," he told a monthly news briefing, according to a transcript posted on the ministry's website. Foreign reporters are not allowed to attend.

This year's Rimpac involved more than 22 nations, including Russia, Japan and India, in waters off Hawaii, but China was not invited. The next one is scheduled for 2014.

China and the United States, the world's two largest economies, have had an on-again, off-again defense relationship in recent years.

Two years ago China severed all military ties over US arms sales to self-ruled Taiwan. Beijing has never renounced the use of force to bring the island under its control.

Pentagon officials have long complained that China has not been candid enough about its rapid military build-up, whereas Chinese officials have accused Washington of viewing their country in suspicious, "Cold War" terms.

US Defense Secretary Leon Panetta urged China in September to expand military relations with the United States to reduce the risk of confrontation.

This week, Chinese and US officers are holding a disaster management exercise in China's southwestern city of Chengdu.

However, China's military modernization continues apace. It has territorial disputes with Japan and various Southeast Asian nations in the South China Sea.-Interaksyon (November 29, 2012 6:48PM)

Philippines 7.1% Growth Surprise May Herald End of Rate Cuts

Philippine growth unexpectedly accelerated last quarter to the fastest pace since 2010 as government spending and investment increased, easing pressure on the central bank to cut interest rates further. Stocks rose.

Gross domestic product increased 7.1 percent in the three months through September from a year earlier, compared with a 6 percent gain in the previous quarter, the National Statistical Coordination Board said in Manila today. The pace exceeded all 22 estimates in a Bloomberg survey, whose median was 5.4 percent.

President Benigno Aquino is increasing spending to a record this year while seeking more than $17 billion of investment in roads and airports. The Southeast Asian nation is forecast to be among the 10 fastest growing economies in 2012, according to a Bloomberg survey, making it less likely that Bangko Sentral ng Pilipinas will cut its benchmark interest rate again in December.

“The Philippines is going to rock,” said Trinh Nguyen, a Hong Kong-based economist at HSBC Holdings Plc. “The central bank and the government have made timely policy adjustments that are boosting trend growth. With momentum so strong, we think BSP will hold rates and mark the end of the easing cycle.”
The Philippine Stock Exchange Index (PCOMP) erased earlier losses and rose 0.7 percent as of 11:44 a.m. in Manila trading. The Philippine peso was little changed at 40.86 per dollar. It has risen more than 7 percent this year, the best performer among Asia’s 11 most-traded currencies tracked by Bloomberg.

Preserving Firepower

Some Asian officials have restrained their stimulus efforts as global expansion slowed, with others refraining from interest-rate cuts to preserve firepower should Europe’s debt crisis worsen. Thailand may hold borrowing costs today, economists said, after a manufacturing production index rose in October for the first time in five months. Meanwhile, India may report on Nov. 30 that GDP rose 5.3 percent last quarter.

Bangko Sentral “will be careful to calibrate the use of its enhanced policy tool kit to help ensure” domestic demand price pressures and risks from capital flows are managed, central bank Governor Amando Tetangco said today.

“In the near-term, our policy stance appears to remain appropriate,” he said. Full-year growth may be 6 percent to 7 percent, Economic Planning Secretary Arsenio Balisacan said.

Moody’s Investors Service raised the country’s credit rating to one step below investment grade in October, luring more pledges from companies including Alliance Global Group Inc. and First Gen Corp. The government signed a peace deal with Muslim guerrillas in the mineral-rich south last month, and said it expects about $1 billion of commitments in Mindanao.

Philippine exports rose 22.8 percent in September from a year earlier, as data signaling a recovery in the U.S. and China boosted the outlook for Asian goods. Inflation eased to a four- month low of 3.1 percent in October, while remittances, which make up the equivalent of about 10 percent of GDP, surged to a record $1.8 billion in September.

The Philippine economy expanded 6.5 percent in the January- September period, today’s report showed. Public construction in the third quarter climbed 23.7 percent from a year earlier, while government spending gained 12 percent and household spending advanced 6.2 percent.-Bloomberg (November 28, 2012 11:52AM)

China Threatens To Board Ships In Disputed Waters

Police in the southern Chinese island province of Hainan will board and search ships which enter into what China considers its territorial waters in the disputed South China Sea, state media said on Thursday, a move which could raise tensions further.

The South China Sea is Asia's biggest potential military trouble spot with several Asian countries claiming sovereignty.New rules, which come into effect on January 1, will allow Hainan police to board and seize control of foreign ships which "illegally enter" Chinese waters and order them to change course or stop sailing, the official China Daily reported.

"Activities such as entering the island province's waters without permission, damaging coastal defense facilities and engaging in publicity that threatens national security are illegal," the English-language newspaper said.

"If foreign ships or crew members violate regulations, Hainan police have the right to take over the ships or their communication systems, under the revised regulations," it added.

China's assertion of sovereignty over the stretch of water off its south coast and to the east of mainland Southeast Asia has set it directly against Vietnam and the Philippines, while Brunei, Taiwan and Malaysia also lay claim to parts.

China occasionally detains fishermen, mostly from Vietnam, who it accuses of operating illegally in Chinese waters, though generally frees them quite quickly.Hainan, which likes to style itself as China's answer to Hawaii or Bali with its resorts and beaches, is the province responsible for administering the country's extensive claims to the myriad islets and atolls in the South China Sea.The newspaper said that the government will also send new maritime surveillance ships to join the fleet responsible for patrolling the South China Sea, believed to be rich in oil and gas and straddling shipping lanes between East Asia and Europe and the Middle East.The stakes have risen in the area as the U.S. military shifts its attention and resources back to Asia, emboldening its long-time ally the Philippines and former foe Vietnam to take a tougher stance against Beijing.

China has further angered the Philippines and Vietnam by issuing new passports showing a map depicting China's claims to the disputed waters.-Black Pearl (November 30, 2012 12:22AM)

Wednesday, November 28, 2012

Thailand to Surpass India as Top Rice Shipper on Stockpiles

Thailand is set to overtake India as the world’s largest rice exporter as the nation accelerates sales from state stockpiles, adding to record global supplies, according to the International Rice Research Institute.

Shipments from India may drop to as low as 7 million metric tons in the year that began Oct. 1, said Samarendu Mohanty, a senior economist. Exports including the aromatic basmati variety more than tripled to 10.4 million tons the previous year, said the U.S. Department of Agriculture. Thailand plans to ship 8.5 million tons in 2013 from 7.3 million tons this year, according to the Department of Foreign Trade.

Rising Thai supplies may increase competition among Asian producers and pressure prices that have risen 1 percent in Chicago this year. A decline in the staple for half the world may further lower food costs that the United Nations’ Food & Agriculture Organization estimates dropped 0.9 percent in October from a six-month high. Global opening stockpiles for 2012-2013 will climb to the highest in a decade, the USDA says.

“Thailand has little choice but to release stocks and that will probably lead to lower prices,” Concepcion Calpe, a senior economist at the FAO, said from Rome. “There will be growing competition from less important rice-supplying countries, such as Brazil, Russia, Egypt and Australia in the export markets, which will tend to reduce prices in 2013.”

Thai Reserves

Thailand’s stockpiles are poised to climb to a record 12.1 million tons by the end of 2012-2013 from 9.8 million tons a year earlier, the USDA estimates. The country will be forced to sell some of the rice it bought from farmers to make space for the new harvest, said Mohanty.

“High stockpiles may force Thailand to sell rice at a cheaper rate in the global market,” Mohanty said. “The world market is already flooded with rice and if Thailand sells below cost, that will weaken prices further.”

Prime Minister Yingluck Shinawatra implemented a price- support policy to boost incomes of farmers who helped her Pheu Thai party win an election last year. The government guaranteed as much as 15,000 baht ($489) a ton for unmilled white rice, about 50 percent more than local market rates, and 20,000 baht for a higher-quality variety.

India is set to export 7.25 million tons in 2012-2013 and Thailand will ship 8 million tons, USDA data show. Vietnam may sell 7 million tons, becoming the third-biggest shipper.

The free-on-board price of 25 percent broken long-grain white rice in Thailand costs as much as $540 a ton compared with $385 in India, said Vijay Setia, former president of the All India Rice Exporters’ Association. Most Indian rice exports are the 25 percent broken variety, he said.

January-delivery contract rose 0.6 percent to $15.015 per 100 pounds at 3:42 p.m. Mumbai time on the Chicago Board of Trade. Prices climbed to a three-year high of $18.37 in September last year.-Bloomberg (November 27, 2012 6:21PM)

Myanmar government orders protesters to end occupation of copper mine

Myanmar’s government ordered protesters Tuesday night to cease their occupation of a copper mine by midnight or face legal action.

State television broadcast an announcement of the order for villagers and other protesters to abandon six camps they had set up at the Letpadaung mine near Monywa in northwestern Myanmar.

The protesters claim the mine is causing environmental, social and health problems. The project is a joint venture between a Chinese firm and a company controlled by Myanmar’s military.

The protest is the latest example of increased activism by citizens since an elected government took over last year following almost five decades of repressive military rule. Political and economic liberalization under President Thein Sein has won praise from Western governments, which have eased sanctions imposed on the previous military government because of its poor record on human and civil rights.

However, this protest, which began in August, poses a direct challenge to the army because of its financial interest in the mine. Opposition leader Aung San Suu Kyi is to visit the area on Thursday to hear the protesters’ grievances, adding to the pressure on Thein Sein’s army-backed government.

The announcement ordering an end to the occupation said operations at the copper mine had been halted since Nov. 18, after protesters occupied the area.

Win Kyawt Hmu, a protester contacted by phone, said some villagers had begun to leave the mining site after authorities read out the order to vacate the area. He said there had been nearly 1,000 protesters at the six occupation camps, including at least 300 Buddhist monks. Buddhist monks in Myanmar have traditionally been closely involved in social protests. It wasn’t immediately possible to confirm those figures.

He said the monks and about 50 villagers remained at the main camp, near the offices of the Chinese partner in the mine, Wan Bao Co. Ltd.

The announcement said parliament had decided to form a committee to investigate the situation at the mine, but could not start its work until it resumes operation.-The Washington Post (November 28, 2012 1:20AM)

Thailand, U.S. Had Biggest Losses From Weather in 2011

The U.S. and Thailand suffered the most economic damage from extreme weather events in 2011, the Berlin-based research group Germanwatch said.

Thailand and the U.S. both endured about $75 billion of damage from storms, floods, landslides and wildfires in 2011, the group said in a report today released in Doha, where two weeks of United Nations climate talks began yesterday. China’s damages totaled almost $13 billion. Pakistan was fourth in the ranking with $5.8 billion and Brazil fifth with $4.7 billion.

When the relative size of countries’ economies are taken into account and death tolls are factored in, Thailand remained the country most affected by extreme weather last year, while the U.S. was seventh, according to the Berlin-based group’s Climate Risk Index. Cambodia, Pakistan, El Salvador, the Philippines and Brazil were second through sixth.

In the two decades through 2011, more than 530,000 people died worldwide as a result of almost 15,000 extreme weather events, causing losses of more that $2.5 trillion, according to Germanwatch. Over the 20-year period, the most affected nations were Honduras, Myanmar, Nicaragua, Bangladesh and Haiti.-Bloomberg (November 27, 2012)

Aggressive ways win for Japan

A Chinese Embassy official admitted on Tuesday   that Japan’s “provocative and aggressive stance” in their dispute in the East China Sea has forced Beijing to bring the issue before the United Nation Convention on the Law of the Sea or Unclos, which he said does not apply with China’s separate territorial dispute with the Philippines.

Beijing and Tokyo had clashed over ownership of the Daioyu Island, which the Japanese calls Senkaku over the past several months, which has sparked deep anti-Japanese sentiments in China.

The official, who asked not to be identified,  said Japan’s actions left “no room” for bilateral negotiations.

The official said the situation with the Philippines was  different, and that Beijing would still want to maintain “friendly relations” with Manila and try to convince them to settle the issue through bilateral negotiations.

“It is our basic line… we wanted to put it into bilateral ways. We didn’t do that (bringing the issue before the Unclos) with the Philippines because we want to talk [in a] more kind of friendly way in this kind of issue,” the official told a select group of reporters.

“We want cooperation with the Philippines,” the official added.

The Chinese official said that bringing China’s dispute with the Philippines before the Unclos or resolving it through an international body would only “complicate” matters.

The official insisted that the only way to resolve the dispute between Beijing and Manila was through bilateral negotiations.

The Aquino government, however, had firmly stood on its position to bring the dispute before an international body, or through a multilateral approach.

Opposition lawmaker Rep. Orlando Fua of Siquijor that the Philippines should not follow Japan’s  example in dealing  with the Chinese on the sea dispute.

“Japan is better equipped than us. I don’t think we should provoke China,” Fua said.

The Chinese official also reiterated a Chinese Embassy’s statement that the Unclos provides a mechanism only for the resolution of maritime dispute and not on the issue of sovereignty.

Aside from its territorial conflict with the Philippines, China is also embroiled in separate disputes over the West Philippine Sea with Vietnam, Brunei, Malaysia and Taiwan.-Manila Standard Today (November 28, 2012 12:01AM)

Japanese firms eye more investments in Southeast Asia

Japanese firms have renewed their focus on Southeast Asian countries as investment destinations, as they increasingly seek to disperse their business bases from China amid bilateral tensions stemming from a territorial dispute.

China has long been one of the hottest overseas investment hubs for Japanese firms, with plenty of business opportunities since they started eagerly investing in the country in the early 1990s. But Southeast Asia has becoming comparatively more attractive in light of the rising costs and difficulties of doing business in China, analysts say.

Around 100 companies last week participated in an event to encourage Japanese companies to invest in Singapore and other members of the Association of Southeast Asian Nations, which was co-organized by the Singapore Business Federation and major Japanese office rental agency Crosscoop Singapore Pte., while around 200 people also joined in a similar event held last week organized by the federation and the Japanese Chamber of Commerce and Industry in Singapore.

The number of participants in the first event almost doubled from a similar seminar held before anti-Japan protests and ensuing boycotts of Japanese products erupted in China, said Motofumi Shoji, managing director at Crosscoop.

"I hear that consumer backlash against Japan is still quite strong (in China). More and more companies are now coming to Singapore to offset such risks," he said.

According to the Bank of Japan's data, Japanese direct investment in ASEAN countries in the April to June period rose around 40 percent from a year earlier to 380.2 billion yen, exceeding 300.5 billion yen in China, on the back of Japanese firms' stance to refrain from heavily concentrating business operations in China amid increasing labor disputes and rising labor costs there.

In 2011, direct investments in ASEAN doubled from the previous year to 1.5 trillion yen and the trend will likely remain the same down the road, financial sources said.

Around 82 percent of Japanese firms operating in China said they would withdraw or downsize their businesses in China due to cost increases, compared to around 39 percent of companies operating in ASEAN countries, according to data compiled by the Japan External Trade organization in fiscal 2011.

"Since last year, Japanese companies have started to turn their eyes again to Southeast Asia. The territorial dispute over the Senkaku islands is also pushing them (to look for production bases in countries other than China,)" said Yosuke Oishi, manager at the Singapore Tourism Board's Japanese branch, which co-sponsored the event.

Among the participants in the event, Chieko Hashimoto, executive producer at sales promotion agency Hiromori Inc., said that the company is planning to open an office in Singapore as its corporate clients are shifting their business focus from China to Southeast Asian countries.

"The adverse affect is tremendous. I think the impact (of the boycott of Japanese products) will last for the time being," Hashimoto said.

Amid strained bilateral economic ties between Japan and China, ASEAN countries are also eager to attract more investments from Japan.

The Department of Trade and Industry of the Philippines has recently sounded out dozens of Japanese firms doing business in China on relocating their operations to the Philippines under its tax break, while Lim Siang Chai, deputy finance minister of Malaysia, said shrinking Japanese investments in China can be a good opportunity for Malaysia to attract more Japanese businesses.

Joshua Ong, director of the Singapore Business Federation's industry development division, said "many companies and investments are now looking into Southeast Asia to expand their markets and opportunities," adding that Japanese firms would benefit from using Singapore as a business platform for making inroads into the region.-ABS-CBN News (November 27, 2012 6:37PM)

Tuesday, November 27, 2012

Japan Is Flexing Its Military Muscle to Counter a Rising China

After years of watching its international influence eroded by a slow-motion economic decline, the pacifist nation of Japan is trying to raise its profile in a new way, offering military aid for the first time in decades and displaying its own armed forces in an effort to build regional alliances and shore up other countries’ defenses to counter a rising China.

Already this year, Japan crossed a little-noted threshold by providing its first military aid abroad since the end of World War II, approving a $2 million package for its military engineers to train troops in Cambodia and East Timor in disaster relief and skills like road building. Japanese warships have not only conducted joint exercises with a growing number of military forces in the Pacific and Asia, but they have also begun making regular port visits to countries long fearful of a resurgence of Japan’s military.

And after stepping up civilian aid programs to train and equip the coast guards of other nations, Japanese defense officials and analysts say, Japan could soon reach another milestone: beginning sales in the region of military hardware like seaplanes, and perhaps eventually the stealthy diesel-powered submarines considered well suited to the shallow waters where China is making increasingly assertive territorial claims.

Taken together those steps, while modest, represent a significant shift for Japan, which had resisted repeated calls from the United States to become a true regional power for fear that doing so would move it too far from its postwar pacifism. The country’s quiet resolve to edge past that reluctance and become more of a player comes as the United States and China are staking their own claims to power in Asia, and as jitters over China’s ambitions appear to be softening bitterness toward Japan among some Southeast Asian countries trampled last century in its quest for colonial domination.

The driver for Japan’s shifting national security strategy is its tense dispute with China over uninhabited islands in the East China Sea that is feeding Japanese anxiety that the country’s relative decline — and the financial struggles of its traditional protector, the United States — are leaving Japan increasingly vulnerable.

“During the cold war, all Japan had to do was follow the U.S.,” said Keiro Kitagami, a special adviser on security issues to Prime Minister Yoshihiko Noda. “With China, it’s different. Japan has to take a stand on its own.”

Japan’s moves do not mean it might transform its military, which serves a purely defensive role, into an offensive force anytime soon. The public has resisted past efforts by some politicians to revamp Japan’s pacifist constitution, and the nation’s vast debt will limit how much military aid it can extend.

But it is also clear that attitudes in Japan are evolving as China continues its double-digit annual growth in military spending and asserts that it should be in charge of the islands that Japan claims, as well as vast swaths of the South China Sea that various Southeast Asian nations say are in their control.

Japanese leaders have met the Chinese challenge over the islands known as the Senkaku in Japan and the Diaoyu in China with an uncharacteristic willingness to push back, and polls show the public increasingly agrees. Both major political parties are also talking openly about instituting a more flexible reading of the constitution that would allow Japan to come to the defense of allies — shooting down any North Korean missile headed for the United States, for instance — blurring the line between an offensive and defensive force.

The country’s self-defense forces had already begun nosing over that line in Iraq and Afghanistan, where Japan backed the United States-led campaigns by deploying naval tankers to refuel warships in the Indian Ocean.

Japanese officials say their strategy is not to begin a race for influence with China, but to build up ties with other nations that share worries about their imposing neighbor. They acknowledge that even building the capacity of other nations’ coast guards is a way of strengthening those countries’ ability to stand up to any Chinese threat.

“We want to build our own coalition of the willing in Asia to prevent China from just running over us,” said Yoshihide Soeya, director of the Institute of East Asian Studies at Keio University in Tokyo.

Or, as the vice minister of defense, Akihisa Nagashima, said in an interview, “We cannot just allow Japan to go into quiet decline.”

The United States has generally welcomed such efforts by Japan, which are in line with its own strategy of building up Asian nations militarily so they can stand their ground against China, as well as expanding an American military presence in the region.

China, which itself suffered mightily in imperial Japan’s 20th-century territorial grabs, has reacted with warnings that Japan is trying to overturn the outcome of World War II by staging a military comeback. At a defense conference in Australia last month, Lt. Gen. Ren Haiquan of China warned his hosts against allying more closely with what he called a fascist nation that once bombed the Australian city of Darwin.

In a measure of the geopolitical changes roiling the region, however, concerns about any resurgent Japanese militarism appear to be fading in some countries embroiled in their own territorial disputes with China, like Vietnam and the Philippines, the scene of fierce fighting during the war.

Analysts there and elsewhere in the region said their countries welcomed, and sometimes invited, Japan’s help.

“We have already put aside our nightmares of World War II because of the threat posed by China,” said Rommel Banlaoi, a security expert at the Philippine Institute for Peace, Violence and Terrorism Research in Manila.

On a recent morning, 22 coast guard officials from a dozen Asian and African nations joined a training cruise around Tokyo Bay aboard a sleek, white Japanese Coast Guard cutter. The visitors snapped photos of the engine room, the electronics-studded bridge and the 20-millimeter cannon. Before the cutter left port, the foreign contingent and the Japanese crew stood at attention on deck facing each other, then bowed deeply.

“Japan is joining the United States and Australia in helping us face China,” said Mark Lim, an administrative officer from the Philippine Coast Guard who joined the cruise.

Japan is widely viewed as being the only nation in the region with a navy powerful enough to check China.

Although Japan’s military spending has been shrinking, the military budget is, by many measures, the sixth largest in the world. In keeping with its pacifist stance, Japan has none of the long-range missiles, nuclear submarines or large aircraft carriers necessary for projecting real power. But its diesel-powered subs are considered the best of their type in the world. The Japanese Navy also has sophisticated Aegis-equipped cruisers capable of shooting down ballistic missiles, and two large helicopter-carrying destroyers that could be retrofitted to carry fighter jets that can take off vertically.

The Japanese Navy took a big step toward opening up in 2009 by holding a joint military drill with Australia — its first such exercise with a nation besides the United States. It has since joined a number of multinational naval drills in Southeast Asia, and in June held its first joint maneuver with India.

Analysts and former officials say Japan’s military has so far been careful to offer assistance in noncombat-related areas like disaster relief, antipiracy and health care. But even these limited steps build ties between military forces. One plan now under negotiation is to train medical personnel from Vietnam’s navy next year to care for the crews on that nation’s newly purchased Russian-built submarines.

“Our strategy is to offer hardware and training to create mini-Japanese coast guards and mini-Japanese Self-Defense Forces around the South China Sea,” said Tetsuo Kotani, a researcher at the Japan Institute of International Affairs in Tokyo.

Under the decade-old civilian aid program to build up regional coast guards, Japanese officials say they are in the final stages of what would be their biggest security-related aid package yet — to provide the Philippine Coast Guard with 10 cutters worth about $12 million each. Ministry officials say they may offer similar ships to Vietnam.

Japan’s Ministry of Defense said it planned to double its military aid program next year to help Indonesia and Vietnam. Vietnam could also be among the countries that Japan would allow to buy its submarines, according to a former defense minister, Toshimi Kitazawa, who named Australia and Malaysia as other possible buyers.

“Japan has been insensitive to the security needs of its regional neighbors,” Mr. Kitazawa said in a recent interview. “We can offer much to increase their peace of mind.”-The News York Times (November 26, 2012)

How Manila Stands Up to the Goliath

By any measure, the Philippines is increasingly emerging as a 'frontline state' in the ongoing Sino-American competition over the destiny of the Asia-Pacific region -- the world's new center of economic and geo-strategic gravity. Desperate to secure its territorial claims within the South China Sea, the Philippines is not only struggling with China's growing territorial assertiveness, but also exploring ways to maintain a measure of self-autonomy amidst America's plans to re-assert its Pacific hegemony.

For Manila, the history is somehow repeating itself, whereby the tiny archipelago is once again finding itself squeezed amid an intensifying great power rivalry. Back in the 19th and 20th centuries, the Philippines was at the forefront of America's competition with colonial Spain and the Soviet Union in East Asia. Obviously, this time Manila is eager to avoid being stamped upon by the march of history, unlike the past.

It's hard to understate Manila's strategic dilemma. On one hand, without America's military-diplomatic support, the Philippines stands heavily outmatched against its Chinese neighbor. While the Philippines' decrepit and under-equipped armed forces subsists on a meager annual expenditure of around $1.5 billion, ranking 59th in the world, the Chinese are the world's second largest spenders, with their $129 billion budget set to double by 2015 -- most of it will feed China's expanding naval 'anti-access' (A2/AD) and blue-water capabilities.

On the other hand, if Manila tilts too much into the U.S.' orbit, it might risk its national sovereignty as well as important bilateral ties with China. (Not to mention, there are lingering doubts as to the extent of the U.S.' commitment to Philippines' security, especially in an event of a direct Sino-Filipino confrontation over disputed features in the South China Sea.) Beijing is already irked by an increasingly revitalized U.S.-Philippine military relations, with elements within the Chinese military repeatedly calling for sanctions against Manila and its alleged role in stoking tensions in Sino-American relations.

At the height of Philippine-China territorial conflicts, when both sides dangerously squared off over the Scarborough Shoal earlier this year, Beijing imposed travel as well as non-tariff barriers against the Philippines' $200 million banana exports. So, Manila has no choice but to take China's threats seriously.

The Post-Cold War Rollercoaster

Like many of its post-colonial peers, the end of the Cold War provided an opportunity for Manila to become a master of its own destiny by veering away from the long and deep shadow of American military-political patronage.

In 1992, the Philippines managed to terminate the U.S. military's forward-deployment presence in Clark and Subic. But, just within three years, Manila watched in horror China's forceful seizure of the previously Philippine-controlled Mischief Reef. Failing to develop a minimum deterrence capability, Manila witnessed an increasingly assertive Chinese expansion in the South China Sea.

In absence of a coherent and effective regional regime to rein in China's alarming behavior, the Philippines' recourse was mere moral suasion and relatively marginal military cooperation with the U.S. and regional powers such as Australia, though primarily focused on the 'Global War on Terror.' At best, Manila was able to secure a non-binding, highly symbolic agreement with China to prevent open conflict over disputed territories. However, the 2002 ASEAN-China Declaration on the Conduct of Parties in the South China Sea was never a substitute for the Philippines' glaring lack of self-defense capabilities. When China stepped up its naval maneuvering in adjacent waters, the Philippines was left little choice but to welcome and encourage America's pivot to the region.

A Tough Balancing Act

The truth is, the tiny archipelago nation has found itself in a tricky situation vis-à-vis China: It faces a rapidly rising China that has simultaneously become an economic boon and a strategic threat. On the economic front, China's booming economy -- buttressed by large local companies eager to invest in emerging markets that are desperate for cheap capital and technology -- represents a huge opportunity for Manila to revitalize its historically anemic economy, strengthen a flailing infrastructure, and expand markets for increasingly high value-added exports. Mainland China is already the Philippines' third largest market,with bilateral trade hovering around $30 in recent years.

Last year, the two sides expressed their hopes of increasing bilateral trade and investment relations to around $60 billion in coming years, potentially making China the Philippines' biggest trading partner. According to some estimates, China's investments in the Philippines could reach as much as $8 billion, with Beijing heavily (or poised to be) involved in major infrastructural projects in the country.

We should bear in mind that in the first decade of the 21st century, Sino-Filipino relations experienced a period of growing economic and strategic ties, thanks to the former Filipino President Gloria Arroyo's efforts to diversify her country's heavily U.S.-centric external relations. However, recent years have introduced a new element of tensions into Sino-Filipino relations, as China stepped-up its efforts in adjacent water of East and South China Seas to cement its hyper-nationalist/populist territorial claims. After all, based on its notorious 9-dotted-line, China claims 'inherent and indisputable' sovereignty over almost all features within the South China Sea. It is particularly this position that has complicated, if not totally obstructed, any multilateral efforts to resolve ongoing territorial conflicts in the South China.

Moreover, China has also been using its economic influence over Southeast Asian countries such as Cambodia, the current chair of the ASEAN, to block any attempts by countries such as Vietnam and the Philippines to put greater pressure on China by (i) forging a unified regional stance and (ii) establishing a binding regional Code of Conduct (CoC) to regulate inter-state behavior over territorial disputes. As a result, the Philippines' diplomatic efforts within the ASEAN have been constantly sidestepped in recent months. But, Manila is still investing in diplomacy, because it knows that it can't risk confrontation and jeopardize booming bilateral trade-economic relations with China.

So, in the meantime, the Philippines is left with little choice but to hedge its bets: It intends on rapidly improving its minimum deterrence capabilities by welcoming greater aid, joint-exercises, and military hardware from as well as deeper operational interoperability with U.S. forces as well as other regional allies such as Japan, Australia, and South Korea.

The situation is really difficult, but don't expect the Philippines -- defined by an undying sense of resilience -- to just roll over anytime soon. It even managed to rename the South China Sea to West Philippine Sea, despite Beijing's repeated condemnations.-Huffingtonpost (NOvember 26, 2012 5:10PM)