Analyst urges ‘derisking’ to limit China’s grip on PH infra

By Ruth Abbey Gita-Carlos, Philippine News Agency

DERISKING STRATEGY. Political analyst Richard Heydarian discusses issues concerning China during a news forum in Quezon City on Saturday (Feb. 1, 2025). He said adopting a derisking strategy would prevent China from gaining control over the country’s critical infrastructure. (PNA photo by Joan Bondoc)

MANILA – Adopting a “derisking” strategy would prevent China from gaining full control over the Philippines’ critical infrastructure, a political analyst said on Saturday.

Speaking at the Saturday News Forum in Quezon City, professor Richard Heydarian acknowledged that the Philippines could not simply “take out China from the equation” but must take steps to limit its influence over key industries.

“Ang kailangan po natin is siguraduhin na mag-derisk tayo.

Ano ang ibig sabihin ng derisk? Kasi dati sabi nila, decoupling, tanggalin lahat ng China (What we need to do is make sure we derisk. What does derisk mean? They used to say, decoupling, get rid of everything China). That’s not doable. China is so important, so advanced, and so our neighbor,” Heydarian said.

“So, what is derisk? High fence, small yards. Meaning, issue-specific but clear safeguards.”

He welcomed the recent Maharlika Investment Corp. (MIC) agreement to acquire a 20 percent stake in the National Grid Corp. of the Philippines (NGCP), partly owned by the Synergy Grid and Development Philippines, Inc. (SGP), which holds a 40 percent share.

“Let’s not get fooled by this 40 percent. Maybe Maharlika fund did the right thing to dilute ‘yung (the) private sector’s 60 percent part. Maybe Maharlika needed to do something nice. It looks good. But it’s not enough,” he said.

“You have to derisk. Hindi pupuwede na ‘yung ating (It’s not acceptable that our) critical infrastructure ay (is) 100 percent run or significantly run by (China).”

The MIC deal is expected to increase the Philippine government’s influence over the country’s power grid operations.

Under the deal, MIC will purchase preferred shares in SGP, granting the government a 20 percent stake in the company, which holds a significant 40.2 percent effective ownership in NGCP, the operator of the country’s power grid.

MIC president and chief executive officer Rafael Consing Jr. earlier expressed openness to acquire shares of the State Grid Corp. of China (SGCC) in the NGCP.

The NGCP is reportedly one of the sites being targeted by the arrested Chinese nationalities allegedly engaged in espionage operations in the country.

‘New Berlin of 21st century’

Heydarian warned that the Philippines, once “relaxed and complacent” due to its geography, is now caught in a major geopolitical struggle.

“Now, things are different. Our geography is also our curse. Nasa gitna na po tayo talaga (We are really at the center) literally ng (of) great power competition. Literally. Why? Because China wants to dominate both the first island chain from East China Sea to Taiwan Strait to West Philippine Sea, but also the second island chain, meaning the Philippine Sea,” he said.

He also branded the Philippines as “the new Berlin of the 21st century,” saying that the country’s case is similar to Berlin during the 1960s.

“When you talk about the 21st century, makikita ang agents na not James Bond-level pero sympathetic sa China or baka binayaran lang (we see agents who are not James Bond-level but are sympathetic to China or maybe they are just being paid),” he said, citing the presence of “sleeper cells” in the Philippines “who are operating really for the interest of China’s ministry of security services.”

Outdated laws

Heydarian also said the Philippines’ outdated laws allow the proliferation of Chinese spies in the country.

“The problem is, our treason law only applies during wartime, and our fines are ridiculously low – some as little as PHP10,000,” he pointed out. “If someone offers you PHP10 million to spy and your fine is just PHP10,000, that’s a good business deal.

So, this is also our fault for not updating our laws.”

“Now, our geography is our curse,” he added. “But it’s only a curse if you don’t do anything about it and you don’t leverage it. So, make it a blessing.”