Philippines–China Relations: Interplay

Between Domestic Politics and

Globalization
Abstract
This chapter illustrates how Philippines–China relations in the past two decades have been
shaped by Philippine domestic politics and regional and global market forces. Philippine
domestic politics—characterized as being personalistic, weak in institutions, and patronage-
based, plus the lack of a coherent China policy—have contributed to the fluctuations in the
Philippine diplomatic relations with China. Relations have also been affected by negative
perceptions of China by the Filipinos—the effect of US alliance, anti-Communist ideology
influence of Taiwan, and presently, China’s claim of islands in the South China Sea.
Investments, loans and ODAs from China are very much affected by the health of the bilateral
relations. However, bilateral trade and non-state-to-state investments are determined by external
economic phenomena such as the impact of global supply network in the 1990s and 2000s,
Global Financial Crisis in 2008–2009, and China’s economic rebalancing after the GFC, and
more recently, China’s OBOR and AIIB initiatives. The paper also shows that, in the past few
decades, Philippine’s outbound investments have shifted from China to ASEAN, which is
aligned more with economic rather than political motivations, aligning with the Duterte
administration’s aims to diversify its foreign engagements beyond the traditional partners.