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Sam Beltran

New findings on Chinese financing in the Philippines are challenging the assumption that Beijing reduced its funding under President Ferdinand Marcos Jnr because of worsening tensions in the South China Sea.
Instead, Chinese capital had continued to support Filipino businesses in recent years, including a US$3.9 billion syndicated loan to telecommunications company Dito Telecommunity in 2023, the largest ever China-backed private-sector loan to the Philippines, AidData, a US-based research group, told This Week in Asia.
Nearly US$9 billion in Chinese loans were provided to the Philippine private sector over two decades from 2000, said AidData, which also highlighted a US$300 million refinancing loan to energy conglomerate San Miguel Global Power for general operations.
The findings suggest geopolitical friction has not been a major influence in Chinese firms’ assessment of funding and business opportunities in the Philippines, according to analysts.
AidData, a research laboratory at William & Mary, a public university in Virginia, found that Chinese financing to the Philippines remained resilient and was becoming more private-sector-oriented.
The Dito loan helped finance a multibillion-dollar contract to manage its 4G and 5G networks nationwide, the latter of which was signed in 2019 with ZTE Corporation, with AidData saying the funds were used to refinance earlier bridging loans that Dito received from Chinese financial institutions.
The third-largest telecommunications provider in the Philippines, Dito is controlled by interests linked to Davao City-based businessman Dennis Uy, a major campaign donor to then president Rodrigo Duterte, through a joint venture in which China Telecom holds a 40 per cent stake.

Duterte was widely seen as more pro-China compared with Marcos during his six-year presidency until 2022.
The Dito loan was signed when Marcos Jnr was president for over a year, during which South China Sea tensions flared up with his administration slamming Beijing for its aggressive maritime activities in the disputed waters and releasing related footage.
In 2023, tensions at the Second Thomas Shoal rose after Manila said the Chinese coastguard rammed Filipino vessels and used lasers to target them. Beijing has disputed Manila’s accounts of the incidents.
The Duterte administration fast-tracked Dito’s permits by granting it an operating licence in 2019 and signing a related law in 2021, enabling Dito to run the networks for 25 years.
“The broader takeaway from this part of our data is that Duterte’s pro-China policies created conditions that kept Chinese capital flowing even after the political climate changed, meaning that shifts in political tone may matter less than the institutional and commercial structures already in place,” Julie Sickell, programme manager at AidData’s Chinese development finance programme, told This Week in Asia.
The timing of the Dito loan merited “a fresh look at how political tensions do or don’t affect the overall level of Chinese financing to the Philippines”, she added.

Blurred lines
The findings come as Beijing faces scrutiny for underdelivering on promised development aid to Manila, with analysts citing bilateral tensions as a factor.
Mark Manantan, a research fellow at the Centre for Global Security at La Trobe University, said: “I’d be careful about drawing too sharp a line between ‘commercial’ and ‘state’ here – the financing instrument is private, but the strategic [telecom] sector is exactly the kind of asset where Beijing has historically valued influence regardless of the financing vehicle.”
Dito’s China Telecom ownership link created a “state-linked ownership stake at the deal’s origin”, even though the loan itself was structured as commercial debt, Manantan said.
Aaron Jed Rabena, an assistant professor at the University of the Philippines Asian Centre, advised against overstating Beijing’s influence in commercial lending decisions.
“There’s this prevailing and popular view that China is a monolithic actor and that it dictates everything. That’s not the case all the time. Private companies follow the market,” Rabena said.
Sickell noted that Chinese entities had continued to lend to private-sector projects in the Philippines and expanded similar support to other countries.
A report by AidData released last year on China’s overseas loans showed that the proportion of its lending to private borrowers was 63 per cent in 2023, compared with 37 per cent for public and publicly guaranteed borrowers, reversing a trend in previous years. The proportion of loans to private borrowers in low- and middle-income countries rose to 44 per cent in 2023 from 14 per cent in 2000.

“Beijing’s sovereign lending – the big state-to-state infrastructure loans that defined the 2013–2018 Belt and Road Initiative wave – has been in retreat for years,” Manantan said.
This was partly due to debt distress faced by countries that China had supported, such as Sri Lanka and Zambia, and Beijing’s shift in focus towards smaller and lower-risk projects, he added.
Chinese capital “hasn’t left” and is moving into bank syndicates, private-sector counterparties and telecoms infrastructure, where it draws less scrutiny and does not require sovereign guarantees or political cover, according to Manantan.
Samantha Custer, a Kelleher fellow at the University of Maryland’s School of Public Policy, said the fluctuations in Beijing’s financing in the Philippines remained highly responsive to ties between Manila and Beijing.
“As the Marcos Jnr administration has assumed a more antagonistic posture towards China, Beijing is still very much engaged in the Philippines but is less interested in attempting to align with the Philippine government’s investment priorities,” Custer said.
China’s interest in financing joint infrastructure ventures reflected a broader global shift towards commercially viable debt financing, and that political networks in the Philippines gave Beijing opportunities to maintain ties with favoured actors, she added, citing the loan to Dito as an example of “Beijing’s relationship with a Duterte-era favourite”.
Manantan said the Dito case showed business ties between Chinese and Filipino companies had continued, with Huawei and ZTE remaining actively involved in developing 5G infrastructure in the Philippines.


“This points to something important that often gets lost in the state-to-state framing: the industry-to-industry relationship between Chinese and Filipino companies has continued largely uninterrupted despite the political fluctuations,” he said.
The global energy crisis due to the Iran war may also create opportunities for China and the Philippines to cooperate in the sector, including financial support, according to analysts.
Rabena said energy security cooperation could increase amid energy supply pressures given that China was the world’s largest investor and producer of renewables.
Manantan said Marcos Jnr had cited the energy crisis as a possible “impetus” to restart talks with Beijing on joint energy exploration in the South China Sea, suggesting diplomatic friction could coexist with commercial cooperation.
“So you have a case where an entirely exogenous crisis, thousands of miles away, ends up softening the bilateral posture even as the maritime dispute itself remains unresolved,” he added.


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The data shows ‘shifts in political tone may matter less’ than commercial considerations, according to AidData, a research group


The data shows ‘shifts in political tone may matter less’ than commercial considerations, according to AidData, a research group.


South China Sea

China-Philippines relations

Rodrigo Duterte

Ferdinand Marcos Jnr

Chinese loans to Philippines stay resilient despite maritime row

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The data shows ‘shifts in political tone may matter less’ than commercial considerations, according to AidData, a research group

The data shows ‘shifts in political tone may matter less’ than commercial considerations, according to AidData, a research group