Arroyo: Duterte policy on China 'similar to mine'

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Metro Manila (CNN Philippines, March 12) — Former President Gloria Macapagal-Arroyo does not find anything wrong with the country's pivot toward China — in fact, she said it was similar to her own policy.

"When I was president, I focused on developing closer economic and business ties with China. That is the policy of President (Rodrigo) Duterte today, similar to mine," Arroyo told CNN Philippines' The Source Monday.

Arroyo, who was president from 2001 to 2010, is now a Pampanga Representative.

She added China was not a rival but "a market, an investor, [and] a donor."

As of November 2017, China has committed to over P382 billion (US $7.3 billion) in soft loans and grants to the Philippines. This includes funding for "big-ticket" projects such as two bridges in Metro Manila, two drug rehabilitation facilities in Mindanao, and for the rehabilitation of war-torn Marawi City.

During Arroyo's term, loans from China amounted to US$2.2 billion (P91.1 billion), according to a 2008 report by the Philippine Center of Investigative Journalism.

In a 2014 publication of the University of the Philippines' "Asian Studies: Journal of Critical Perspectives on Asia," it said China became a significant contributor to the Philippines during the Arroyo administration due to China's  easy loan payment scheme, infrastructure projects, and military aid.

Arroyo also oversaw the signing of the US$329 million contract between the National Broadband Network and the Chinese firm ZTE in 2007.

However, the controversial contract for a project that would have interconnected government offices nationwide through broadband technology was allegedly overpriced by more than 50 percent.

She was, however, cleared of graft charges in 2016.

The former president also entered a Joint Marine Seismic Undertaking (JMSU) with China and Vietnam for exploration in disputed South China Sea waters. The agreement was criticized for being unconstitutional, and it expired in 2008.

Arroyo's predecessor Benigno Aquino III took a harder stance against China, winning a case favoring the Philippines' claim at the arbitral tribunal in The Hague.

Under Duterte, joint exploration was again considered.

Related: PH eyeing 'joint exploration' in 2 S. China Sea areas – Palace

Duterte forged warmer relations and billions worth of deals with the eastern giant, despite the maritime row. While government officials maintain they are following a diplomatic strategy, critics and experts are concerned about continued militarization and an eventual ceding of the contested islands.

Arroyo praises Duterte

Arroyo further said Duterte "[has] done an awesome job" in the first two years of his presidency.

"His promise about peace and order, he is complying with. As far as economic policy is concerned, his tax reform complements [mine]," said Arroyo.

Duterte's tax reform program has with lowered income taxes but raised tax of fuel and sugar-sweetened beverages.

The Build, Build, Build infrastructure program was "a step in the right direction," and necessary for a good investment climate, Arroyo added.

She added she was not alarmed by concerns that the infrastructure program would put the country in debt.

"You can increase your debt in absolute numbers, but the important thing is, what is your debt ratio to your [gross domestic product]," said Arroyo. "The economic managers of President Duterte are very well aware of those ratios."

Support for charter change

Arroyo, who pushed for charter change during her term as president, has also thrown her support behind a review of the 1987 Constitution under the Duterte administration.

"[The charter] should be reviewed and all the pros and cons should come out so the people will be very well aware of the issues," said Arroyo.

"What I like personally about the federal form of government is it shifts power away from the center to the regions," said Arroyo.

She added that foreign ownership had to be reviewed. The Constitution bans full foreign ownership of businesses in the Philippines.

Duterte's administration, which is also seeking to loosen the rules on foreign ownership, is pushing for federalism. Proponents of the system said it will empower local governments, but critics fear it will empower political dynasties.

Arroyo added she was looking forward to the findings of the constitutional review committee, led by former Chief Justice Reynato Puno.

Watch the full interview with Arroyo here.