Chinese Capital Takes a Detour, Philippines Urgently Seeks New Investors - Is the US the Lifeline?

Recently, a statement by Philippine Trade and Industry Secretary Pascual garnered widespread attention. He stated that economic security would become the cornerstone of the Philippines' strategic relationships with its allies and openly urged the United States and its allies to increase trade and investment in the Philippines.

This raises the question: Is the Philippines facing an economic crisis so severe that it urgently seeks aid from the US?

In fact, the Philippines is indeed under significant economic pressure. The strained relations between China and the Philippines have cast a shadow over the country's economic outlook. Since the Marcos administration took office, disputes with China over the South China Sea have been ongoing. These actions have undoubtedly heightened tensions in the South China Sea region, leading to a sensitive and delicate situation between China and the Philippines.

Against this backdrop, Chinese capital has begun to bypass the Philippines, turning to other Southeast Asian countries. Data shows that in the first nine months of last year, Chinese investment in Vietnam reached $2.9 billion, accounting for 15% of Vietnam's foreign investment, while direct investment in the Philippines was only $12.2 million, down from the previous year.

This trend is undoubtedly a "danger signal" for the Philippines, which has long lagged behind other Southeast Asian countries in attracting foreign investment. Now, with the withdrawal of Chinese capital, the economic outlook for the Philippines has further worsened.

To fill this gap, the Philippines has had to turn its attention to the powerful United States and its allies, hoping these countries will increase their investment to support the recovery and development of the Philippine economy. In March of this year, US Commerce Secretary Raimondo announced a plan to invest over $1 billion in the Philippine technology sector, bringing a glimmer of hope to the Philippine government. Additionally, US President Biden has pledged to assist the Philippines in infrastructure projects, further raising the Philippine government's expectations for US investment.

However, can US investment truly meet the Philippine government's hopes? Even if the US increases its investment in the Philippines, it may not fully meet the country's actual needs. After all, the focus of US investment in Southeast Asia is not entirely on the Philippines. Moreover, Southeast Asian countries generally view China as an important economic and political partner. While some countries may seek favor with the US, most are reluctant to take sides between China and the US

The Philippine government's concerns about economic security are understandable. However, relying solely on external "infusions" for economic recovery is less effective than focusing on internal development. Only by doing so can the Philippines achieve sustainable economic growth and prosperity.