Philippines may terminate major CCCC construction deals following US sanctions

The Philippines’ foreign minister said today he would "strongly recommend" that his government terminate contracts with Chinese construction companies sanctioned by the US this week.

On Wednesday US secretary of state Mike Pompeo lashed out at China Communications Construction Company (CCCC) and several of its subsidiaries for their work in creating artificial islands in disputed areas of the South China Sea, as well as their role in the Belt and Road Initiative (BRI).

He imposed visa restrictions on individuals responsible for the reclamation work, while the US Department of Commerce added several subsidiaries of CCCC to its "Entity List", meaning they, like tech giant Huawei, will have to obtain a licence to receive US-made products.

In comments to media, foreign minister Teodoro Locsin said he was not sure if the companies named were working in the Philippines.

But he told CNN Philippines that "if I find that any of those companies are doing business with us, then I would strongly recommend we terminate that relationship with that company".

In fact, CCCC, one of China’s largest contractors, is constructing the $10bn Sangley Point International Airport in Cavite Province, on the southern shores of Manila Bay.

The project, undertaken with local partner Macroasia, involves land reclamation and the expansion of an existing airport.

And CCCC subsidiary China Harbour Engineering Company has been given the go-ahead for a €650m reclamation project in Manila Bay (see further reading).

Juanito Victor Remulla, the governor of Cavite, said he would take his cue from Rodrigo Duterte, president of the Philippines, on how to proceed.

"If the president says, if the Department of National Defence says, that it’s a security risk to enter an agreement with them, then we will terminate the agreement immediately," he told news channel ANC.

In recent years, the Philippines has been wavering between the US, with whom it has historic ties, and China, which has offered to make investments in much-needed infrastructure.

In 2016, the Philippines won a case in the Permanent Court of Arbitration in The Hague that confirmed that one of the islands claimed by China, Mischief Reef, had been built in Manila’s 200-mile territorial waters.

Image: Manila Bay, where CCCC is involved in building an airport and dredging artificial islands (Bombona78/CC BY-SA 4.0)

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