Chinese Investors Looking to Build on Cagayan's Strategically Located Fuga Island

The Navy has raised concerns over the Chinese investments.

(SPOT.ph) Now that China is nearly done building on contested island territories in the West Philippine Sea, they're looking to build on other areas as well. Chinese investors are reportedly investing in three strategically located Philippine islands: they propose to build a U.S. $2 billion city on Fuga Island, located just off the Philippines' northernmost coast right between the Pacific Ocean and the West Philippine Sea, as well as other projects on the Grande and Chiquita islands in Subic Bay, both of which are a few hundred kilometers away from Panatag Shoal, the disputed area internationally known as Scarborough Shoal.

The projects, which are just a part of the 19 business deals signed during President Rodrigo Duterte's visit to China in April, will see Fuga Island turned into a "Smart City" by Xiamen-based Fong Zhi Enterprise Corp. According to the Cagayan Economic Zone Authority, the Chinese company will set up an agricultural center, an industrial park, and medical schools on the island.

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"No actual investments have been made yet, only a soft commitment to invest," said Gabriel Lingan, the business development and marketing chief of the Cagayan Economic Zone Authority (CEZA), in a report by Philippine Daily Inquirer

A U.S. $298-million project for the islands of Grande and the nearby, smaller, Chiquita was also signed with GFTG Property Holdings and Sanya CEDF Sino-Philippine Investment Corp. during the April visit. Both islands in Subic Bay were used by the Americans and Spaniards as key defense areas. 

The Office of National Defense Secretary Delfin Lorenzana was apparently not told of the deals, according to an ABS-CBN News report. They were "not also consulted when [the islands were] offered to the Chinese for development into a tourist destination."

In the same report, the Philippine Navy has also raised concerns over security implications of a Chinese investment on the islands, especially Fuga. As part of the Babuyan archipelago, its features could "potentially control access to Luzon Strait," said Navy spokesperson Captain Jonathan Zata in the Philippine Daily Inquirer report. A telecommunications submarine cable also lies next to the island. "If this could not be properly secured this might impact on our capability to get in touch with the rest of the world," said Captain Zata.

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"We’re calling their attention na please consider the security implication of these islands, or of these locations, should the national government or higher leadership desire or decide to convert it into something more useful than its current state," he continued, referring to all three islands. 

According to 2014 reports, Fuga Island is currently on a 25-year lease to an American national, who paid the Fuga Island Holdings Inc. of the Serafica Family around P90 billion pesos. There are around 2,000 people living on the island, which spans an area of around 100 square kilometers. 

More than just people though, a 2004 survey of the Babuyan Islands found that the area is a rich biodiversity hotspot, too. The islands are home to 126 bird species, 18 mammals, 31 reptiles and seven amphibian species. Of the many animals, 21 are endemic and 18 are near-threatened. No word yet on how these developments are to affect the people and the wildlife that call the area home. 

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Main image from Google Maps.

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