Media pundits, Economic Hitmen and Duterte’s Rebalancing

December 10, 2018

By Dan Steinbock

President Duterte’s recalibration of Philippine foreign policy has the potential for greater stability in the region. But it has unleashed the wrath of media pundits and economic hitmen.

During President Xi Jinping’s visit to Manila, some 30 bilateral agreements were signed. A memorandum of understanding (MOU) on cooperation on oil and gas development in the South China Sea topped the list of deals in trade and investment, infrastructure, and cooperation on the Belt and Road Initiative.

Duterte’s recalibration seeks to couple longstanding relations with the U.S. with Sino-Philippine economic cooperation. It is a balancing act, not an act of exclusion. In contrast, there was an element of exclusion in the foreign policy in the Aquino era when good relations with Washington were seen to require distance from China.

Today, some critics of the Duterte policies push similar exclusionary ideas seeking to misrepresent or undermine the Sino-Philippine rapprochement. Ostensibly, this occurs in the name of Philippine national interest, yet these pundits and hitmen are affiliated by external economic and geopolitical interests.

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Let’s take a closer look at just two such examples. Neither is an isolated case. More recent examples abound. And still more are likely to occur in the future.

Media pundits and geopolitical interests

A year ago, the Asia Maritime Transparency Initiative (AMTI), a U.S. think-tank, published a release about “A Constructive Year for Chinese Base Building.” What made the long report intriguing were the many satellite photos and aerial imagery. Yet, the pre-Christmas release did not generate much chatter.

A month later, Richard Heydarian, portrayed as an independent academic and policy adviser, released an AMTI update, “ASEAN Under Duterte: Lost Opportunities on the South China Sea” (Jan 12, 2018). Heydarian complained that “under Duterte’s watch, ASEAN has lost a crucial opportunity to hold China to account.” Thereafter, GMA News headlined his “take on PHL allowing China to do maritime research in Benham Rise” (January 23, 2018). He was portrayed as “GMA News resident analyst.” No mention was made about his author affiliation with AMTI.

To foster debate, the Inquirer’s Frances Mangosing released another “exclusive” entitled “New photos show China done with its militarization of South China Sea” (Feb 4, 2018). The “source” of aerial photos was not identified, but the photos were reminiscent of those published previously by the AMTI. That led to a new – this time anonymous – AMTI release based on Inquirer’s story, which noted that most images “were taken in late 2017 by an unspecified patrol aircraft from an altitude of 1,500 meters” (Feb 16, 2018). It was followed by Mangosing’s new piece, “Kagitingan Reef may be China’s ‘intelligence hub’ in Spratlys – US think-tank” (Feb 18, 2018), based on the AMTI release.

In reality, AMTI is a subsidiary of the Center of Strategic and International Studies (CSIS), a multimillion-dollar U.S. think-tank led by members of U.S. government, State Department, Congress and Pentagon. Heydarian is a member contributor of the AMTI, the CSIS, and Council for Foreign Relations. His Twitter account is visualized by the UK-based International Institute for Strategic Studies (IISS), which is pushing an “Indo-Pacific Age” in Asia – which just happens to be the name of Heydarian’s forthcoming book.

That leaves the mystery of the source of the satellite photos. In addition to CSIS/AMTI, they belong to DigitalGlobe, which is a U.S. multibillion-dollar vendor of space imagery and geospatial content. In 2016, DigitalGlobe teamed up with Amazon, which has a $600 million 10-year cloud deal with the CIA, and CIA’s venture arm In-Q-Tel which has been active in Silicon Valley since 1999.

There is nothing illegitimate about such affiliations or the content they produce. But they are beholden mainly to U.S. geopolitical interests. Truthful journalism should acknowledge such linkages, not suppress them.

Hitmen and economic interests

Since 2016, President Duterte has pushed an infrastructure investment program which relies on sustained growth at close to 7% per year. The strategy is to become an upper middle-income economy by early 2020s. Yet, the effort has been almost systemically misreported internationally.

In May 2017, Philippine Department of Budget and Management (DBM) estimated that $167 billion would be spent on infrastructure during Duterte’s six-year term. A day later, Forbes released a widely-distributed commentary, which alleged that this debt “Could Balloon to $452 Billion: China Will Benefit.” The author, Anders Corr, expected the Philippine government debt of $123 billion to soar to $290 billion. Assuming that most monies would come from China and with excessive mafia-type interest rates, Corr argued that with accrued interest Philippines would end up in debt bondage as debt-to-GDP ratio would balloon to a world-record of 296%.

Like Heydarian, Corr was framed as an independent observer. Yet, according to his own testimony and that of U.S. Naval Institute, he has done “field research” in Vietnam, the Philippines, and Taiwan. He has had “deals” with Pentagon on Russia and Ukraine. In Afghanistan he has served US Pacific Command and U.S. Special Operations Command Pacific for U.S. national security in Asia.

After the 2017 Forbes debacle, Corr seemed to disappear from public debates. Now he’s back, particularly in Australia. He has urged Trump to get tougher in South China Sea, bullied Pakistan with sanctions, advocated US nuclear weapons against North Korea and blamed China for being the ringleader of global terrorism. Despite grossly failed projections, he continues to be used an “expert” by major media.

Corr also has his media trolls. In August 2017, Singaporean-based ASEAN Today, which has many references to Corr’s pieces, published his Forbes piece with the new title: “Is the Philippines heading into a debt crisis?” Maybe the idea was to divide the ASEAN Summit, which Duterte would host weeks later. Yet, the piece was signed by ASEAN Today’s editor Oliver Ward. Interestingly, Ward does not reside in Singapore, but in Boston, U.S. where he also contributes to The Hill Reporter and OpenDemocracy sites, which are funded by Soros foundations and National Endowment for Democracy (NED). Around the same time, the NED also hosted the launch of Heydarian’s critical book on Duterte in the U.S.

So what’s the truth about the alleged “debt bondage”? Let’s compare these forecasts with IMF projections. Between 2017 and 2022, the DBM estimated the debt would mildly decline. My estimate was slightly more conservative because I expect trade wars to have some adverse impact toward 2019-2020. In contrast, Corr claimed Philippine debt-to-GDP ratio would soar to 300% of GDP by 2022. In reality, IMF’s forecast is closely aligned with my projection and that of DBM. In contrast, Corr’s “projections” have nothing to do with reality (Figure).

Figure Philippines Government Debt, 2017-22E (% of GDP)

The lessons

The moral of the story is that, in the Philippines debate about China and the U.S., independent analysts may sometimes be not that independent. Transparent initiatives may at times prove very opaque. Democracy organizations may promote anti-democratic goals. And even reputable reporters, observers and economic analysts may occasionally serve as assets for external interests – knowingly or not.

In such circumstances, mainstream news may be less about actual news than about carefully choreographed exercises of soft power.

About the Author:

Dan Steinbock is the founder of Difference Group and internationally recognized expert of the multipolar world economy. He has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Center (Singapore). For more, see     

The original commentary was released by The Manila Times on December 11, 2018