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Philippines says won’t stop projects with China firms blacklisted by U.S.

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MANILA (Reuters) – The Philippines will not halt infrastructure projects involving Chinese firms blacklisted by ally the United States and will act in its own interests, not those of a foreign power, the president’s spokesman said on Tuesday.

President Rodrigo Duterte will not follow Washington’s move to sanction Chinese firms involved in building and militarizing artificial South China Sea islands, because infrastructure was a national priority, Harry Roque told a regular briefing.

“We are not a vassal state of any foreign power and we will pursue our national interest,” Roque said.

Duterte has a race against time to make headway in his $180 billion infrastructure overhaul, which is fraught with complications.

The United States, a defense treaty ally of the Philippines, has blacklisted 24 Chinese companies and targeted individuals over the building of military facilities on reefs in disputed waters, escalating tensions with Beijing.

The Philippine foreign minister had recommended his government terminates deals with those entities.

Duterte’s non-intervention could cause some friction, as several of China’s islands challenge his country’s interests, especially Mischief Reef, built within its 200-mile Exclusive Economic Zone and equipped with missiles capable of striking the Philippines.

Among firms involved are China Communications Construction Co (CCCC) (601800.SS), which has teamed up with a Philippine partner for a $10 billion airport project, and its subsidiary, China Harbour Engineering Company, which is partnering on a $1.2 billion reclamation project with the firm of tycoon Dennis Uy, Duterte’s top election campaign donor.

China Harbour will partner with the Philippines’ richest family on another $1.86 billion reclamation venture.

Those firms have not responded to Reuters requests for comment.

China’s ambassador, Huang Xilian, welcomed Duterte’s decision.

“Any attempt to undermine the normal economic cooperation between China and the Philippines will never succeed,” Huang said in a statement.

Opposition Senator Risa Hontiveros filed a resolution on Tuesday to investigate possible collusion by Filipinos over China’s artificial islands.

“It is not hard to suspect dubious engagement by either party,” Hontiveros said.

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