Philippine Navy Warns of Chinese Investment on Strategic Islands

Grande Island in Subic Bay, 1983 (USN file image)

Published Aug 5, 2019 8:56 PM by The Maritime Executive

The Philippine Navy has gone public with concerns about the risk of allowing Chinese private investors to develop three strategic islands for civilian purposes. 

Two (Grande and Chiquita Islands) sit in the entrance of Subic Bay, the deepwater port that was once the heart of America's presence in East Asia. Grande Island, the larger of the two, has strategic significance: it was fortified in the WWI era and manned for harbor defense in the early years of WWII. 

In 2015, the Philippine Navy reopened a portion of the former U.S. Navy base in Subic Bay to provide a home port for its warships near disputed areas of the South China Sea. Subic is also the home of an essential part of the Philippine Navy's shipbuilding industrial base: the service has recently taken an interest in fending off Chinese investment in the defunct HHIC-Phil shipyard, located on the bay's west side. The Philippine Navy is looking into taking a portion of the giant HHIC-Phil site for its own operations in cooperation with private investors. 

The third island slated for Chinese investment, Fuga Island, is located in the Strait of Luzon adjacent to a hub for the Philippines' underwater communications cables. The proposed project for Fuga Island is the “One Belt One Road Fuga Island New Smart City,” a master-planned $2 billion development that will include a high-technology industrial park and a medical school, according to the Cagayan Economic Zone Authority. 

Navy spokesperson Capt. Jonathan Zata told the Inquirer that the island has strategic significance for use controlling access to the strait. He added that the subsea cables near the island are important for the Philippines' connectivity and are a strategic asset. "If this could not be properly secured this might impact on our capability to get in touch with the rest of the world," he told ABS CBN.