Philippines eyes scrapping of contracts with Chinese firms over role in South China Sea

Foreign Secretary Teodoro Locsin in a file photo from 2018.
Foreign Secretary Teodoro Locsin in a file photo from 2018.PHOTO: TEDDY BOY LOCSIN/FACEBOOK

MANILA  - The Philippines’ top diplomat on Friday (Aug 28) said he would back moves to end contracts with Chinese firms involved in reclamation projects in the South China Sea, taking the lead from the United States.

“If I find that any of those companies are doing business with us, then I would strongly recommend terminating the relationship with that company,” Foreign Minister Teodoro Locsin said in an interview aired by CNN Philippines.

The Trump administration on Wednesday added 24 Chinese companies to a government list that bans them from buying American products and technology, citing their role in helping the Chinese military construct artificial islands in the South China Sea.

These include subsidiaries of construction giant China Communications Construction, which was awarded a contract to build an airport south of the Philippine capital Manila.

“If they are in any way involved in the reclamation, then it becomes consistent on our part to terminate any contract with them,” said Mr Locsin. But he acknowledged that “they could sue us back”.

China has been rapidly building artificial islands in the South China Sea since 2013, dredging and constructing more than 3,000 acres of new land, including air defence and anti-ship missile features.

One of these islands, on Subi reef, sits just 22km off Thitu island, the Philippines’ largest outpost in the Spratly island chain, in the southern half of the South China Sea.

Another one was built on Mischief reef, which is only 32km west of Second Thomas shoal, where a platoon of Filipino marines is stationed inside a World War II wreck the Philippines beached in 1999. 

Mischief reef is the closest Chinese-held position to the main Philippine archipelago at 210km, a distance a fighter jet can cover in less than 8 minutes.

Manila and Beijing have also been in a heated dispute over Scarborough shoal - a prime fishing site some 240km off the coast of the main Philippine island of Luzon - that China seized in 2012 after a naval standoff.

China began transforming reefs, shoals and atolls it occupies in the disputed waters into artificial islands shortly after that standoff.

The standoff had prompted Manila to file an unprecedented international legal challenge against Beijing, arguing that China’s so-called nine-dash line that marks its claims to nearly all of the South China Sea runs counter to international law. 

The tribunal in The Hague sided with the Philippines, and dismissed China’s claims in 2016. But China refused to recognise that ruling. 


Last month (July), US Secretary of State Mike Pompeo offered an endorsement of that ruling and said Washington was recognising the Philippines’ claims over Subi and Mischief.

The Philippines’ Foreign Ministry has lately taken a more defiant stand against Beijing.

On Wednesday, Mr Locsin said the country would continue patrolling the Spratlys, ignoring a warning from China to stop “illegal provocations” in disputed waters.

Manila has also lodged a diplomatic protest over what it said was China’s illegal confiscation of fish aggregating devices from Filipino fishermen at Scarborough shoal. 

It also protested China’s “continuing illicit issuances of radio challenges (to) Philippine aircraft conducting legitimate regular maritime patrols”.