UPDATE 1-Top Philippine diplomat recommends scrapping deals with blacklisted China firms

* Blacklisted Chinese firm has projects in Philippines
* Chinese company is linked to Mischief Reef
* China, U.S. should resolve differences - Duterte spokesman

(Adds presidential spokesman's comments)
By Karen Lema and Neil Jerome Morales
MANILA, Aug 28 (Reuters) - The Philippines' foreign minister
said on Friday he would recommend the government terminates
deals with Chinese firms blacklisted by the United States for
their roles in constructing and militarising artificial South
China Sea islands.
The United States this week named 24 Chinese companies and
targeted individuals it said were involved, in its first
sanctions move against Beijing over the South China Sea. China
called those unjust. "If they were in any way involved in the reclamation, then
it becomes consistent on our part to terminate any contract with
them," Foreign Secretary Teodoro Locsin told CNN Philippines,
without identifying a company or project.
Among those blacklisted was China Communications
Construction Co (CCCC) 601800.SS , which is set to build a $10
billion airport project with a local partner in Cavite, near
Manila.
CCCC's subsidiary, China Harbour Engineering Company has
teamed up with Udenna Corp, run by Dennis Uy, a fast rising
tycoon with close ties to Philippine President Rodrigo Duterte,
for a proposed $1.2 billion reclamation project in Manila Bay.
Cavite governor Juanito Victor Remulla told news channel ANC
that if Duterte or the defence ministry saw the airport deal as
a security risk "then we will terminate the agreement
immediately".
Presidential spokesman, Harry Roque, said Duterte's main
consideration was the government's infrastructure programme,
adding that the region would benefit if China and the United
States "resolve any and all issues between them amicably and
peacefully".
Udenna Land, Chinese Harbour's partner in the reclamation
project, and Pasay City, which oversees the Manila Bay
reclamation, did not respond to requests for comment.
However, when asked in December if Udenna was concerned
about partnering with a company involved in Mischief Reef, a
missile-equipped artificial island built by China inside the
Philippines' 200-mile exclusive economic zone - an Udenna
official said Uy "is not concerned".
In the December response to emailed questions from Reuters,
Leo Venezuela, Udenna's Investor Relations Head, added the
company has "a very insignificant stake" in the project.