Recent developments in the Philippines have placed the country in the middle of a Sino-American great power rivalry. In June 2024, tensions flared between China and the Philippines in the South China Sea (SCS) when pictures came out of the Chinese Coast Guard threatening Filipino crew with knives and spears near the Second Thomas Shoal. These actions, together with the latest assertiveness of China in the region have led to concerns towards the possibility of armed conflict. Meanwhile, the Philippines has been enhancing its defense partnership with the US, deepening scopes for military usage and staging joint drills.
Philippines as a Geopolitical Pivot
At the center of the Philippines’ geopolitical significance is its locus relative to the SCS, a $3 trillion global transit route for trade that is also thought to hold vast untapped oil and gas reserves, estimated at over 11 billion barrels of oil and 190 trillion cubic feet of natural gas. However, China has a vast “nine-dash line” territorial claim that overlaps with the Philippines’ rights to the West Philippine Sea which the latter stresses rights due to its 200-nautical-mile EEZ. Such overlapping claims have caused many sea incidents between China and the Philippines in recent years. One very crucial event was the Scarborough Shoal standoff in 2012 when Chinese maritime grabbed control of the Scarborough Shoal from the Philippines. This event shifted Manila to more strongly internationalize the conflicts and call for increased U.S. engagement as a counterweight against China.
In addition, the Second Thomas Shoal appears to be a tinderbox, claimed by both China and the Philippines. Recently, Chinese ships collided with the Philippines’ ships in the area. In June 2024, the Chinese Coast Guard pointed weapons at the Filipino crew and attempted to board resupply vessels. This aggressive action amplified the fears of potential armed conflict and prompted warnings from Philippine officials about the risks of regional war. By the way, the strategic importance of the Second Thomas Shoal is not just in its measly dimensions. To the Philippines, diplomatically asserting a presence there is regarded as necessary to protect its wider maritime claims. Manila is concerned that should it fail to maintain control over the shoal, Beijing could proceed to build military installations on it, as on other contested structures in the Spratly Islands. As for China, the possession of the Second Thomas Shoal falls under a bigger plan of controlling the area that comprises the SCS.
The US considers free navigation in the SCS as crucial for their geopolitical interest and has conducted several patrols to counter China’s claims on the waters. From Washington’s perspective, what is very important for the US is to protect the territorial integrity of its ally—the Philippines—by deterring China’s expansion and thus, thwarting its rise as a revisionist power. Besides SCS, the Philippines’ location near Taiwan is another geostrategic factor. The US has been increasing military deployment and operations in the north of the Philippines, with the deployment of new missile systems to Northern Luzon in April 2024. With respect to this, the current President of the Philippines Ferdinand Marcos Jr. has acknowledged that it will be “very hard to imagine” that the Philippines will not be entangled in the Taiwan conflict considering its strategic location.
Security Ties and Regional Alliances
The security partnerships of the Philippines have recently experienced remarkable changes as Manila seeks the balance between the longstanding US alliance against the rapidly strengthening economic cooperation with China, aiming for hedging. The Philippine-US bilateral relationship is the anchor of Manila’s security structure, cemented by the Mutual Defense Treaty (MDT) signed in 1951. The treaty has been at the heart of the Philippines’ foreign policy for many years in offering Manila security assurance against outside threats. However, the partnership has not been devoid of certain breakthroughs and downs as well during the period of Rodrigo Duterte (2016-2022) as he embarked on a decisive shift from the US to China. In addition to Duterte’s pro-China tilt, he also threatened to abrogate the Visiting Forces Agreement (VFA) that facilitates the US military presence in the Philippines, although later it was restored. The rotational presence of the US troops in the Philippines was also delayed under Duterte especially the implementation of the 2014 Enhanced Defense Cooperation Agreement (EDCA) which allows the US troops temporary access to Philippine military facilities.
The election of the current President Marcos in 2022 has caused another shift in the Philippine foreign policy. Marcos has reinvigorated cooperation with the US while attempting to assume a stronger line on Chinese assertive actions in the SCS. A very important development under Marcos has been the expansion of the EDCA. Also in February 2023, the Philippines consented to facilitate the US military to use four more EDCA sites, raising the number of sites to nine. Among these new locations, some are directed toward the SCS and Taiwan, putting a huge boost to the US footprint in the area.
Along with the change, there has been development emerging in defense relations with Japan. In July 2024, the Philippines and Japan signed a defense pact for the use of each other’s soil by the troops and the exchange of military facilities. Moreover, with Australia and Japan, the Philippines conducted joint military drills and naval operations including regular joint amphibious landing exercises. The Philippines’ Defense cooperation with India also has been developed, though not yet to the same extent as with other partners. These dynamics exhibit Manila’s pursuit of strategic autonomy in order to avoid over-dependence on any single ally, diversifying its partnerships. However, this approach also is not out of risk since it needs careful diplomatic maneuvering to balance competing powers and manage multiple security relationships.
Risks of The EDCA Expansion
While some proponents considered the EDCA expansion a necessary step to bolster the defense capabilities of the Philippines and to daunt Chinese presence, critics cautioned against the risks of escalation as well as entanglement in great power rivalry. By allowing the US forces access to Philippine military bases, the agreement might increase the country’s aptitude to respond to maritime threats and natural disasters. The US Secretary of Defense Lloyd Austin stated that the move would “strengthen our alliance and enhance our ability to share, to operate and to train together.”
However, on one hand, the greater US presence would work as a deterrent against Beijing on Philippine-claimed territories. On the other hand, the EDCA expansion might bring about risks for the Philippines in getting into Sino-American competition. The Chinese embassy in Manila urged that the Philippines should “stay vigilant” against being taken advantage of by the US. Additionally, Justin Baquisal said that “the EDCA is subject to a review in 2024 (Article XII) and entitles the Philippines to retain non-relocatable structures and improvements developed by the United States (Article V) even in the event that the deal is terminated.” Looking ahead, some scholars warn, ‘It will [become] a cold war of military rivalry and a stage for strategic competition between China and the US. Cagayan’s strategic resurgence came at a point when local leaders became pawns for the hegemonic rivalry of superpowers.’
Manila’s Dilemma
The Philippines now faces a considerable dilemma regarding economic relations with China on the one hand, with security concerns and ally partnership with the US on the other. Focusing on the trade volume, with $41 billion in mutual exports and imports in 2023, China was the leading trading partner for the Philippines. In 2023, China’s exports to the Philippines were US$52.4 billion, while in 2022 it was $53.6 billion. There have also been more Chinese investments in the Philippines especially under the BRI. In a state visit of Chinese President Xi Jinping in November 2018, the two countries agreed to 29 deals in investment and credit facilities of $12 billion, including issues like infrastructure and construction, agriculture and food security, energy and mineral resources etc. Nevertheless, the outcome of such an approach has at best been non-conclusive. As for the large-scale infrastructure development projects pledged by China, quite many of them have either been delayed, inflated or completely shelved. In 2018, Bloomberg reported that of the $24 billion investment pledged by China to the Philippines since 2016, only $3.9 billion had been materialized. However, some of the projects, for instance, the Kaliwa Dam have also faced criticism for social and environmental impacts.
On the other hand, the US has been the third largest trading partner of the Philippines and one of its main sources of investment. Despite that, the diplomatic rapport of the Philippines with the US is also influenced by its economic relationship with China. Although the economic relations between the two countries are still strong, there was a fear that the growing Chinese economic power might harm the strategic cooperation. These issues have been further complexed by disagreements about security risks associated with Chinese investments in the country’s strategic sectors. In 2019, there were questions over a Chinese company’s role in one of the projects of the former US Navy facilities in Subic Bay, which once again shows the economic and security nexus. Still, the Marcos administration holds stronger avowals of sovereignty over the disputed waters. During Marcos’ state visit to China which took place in January 2023 wherein he aimed at working closer economically but also expressed his concern on the SCS issues with China. Also, the Philippines’ participation in regional economic cooperation, including the Regional Comprehensive Economic Partnership (RCEP) and the Indo-Pacific Economic Framework (IPEF), demonstrates its attempts to develop various economic relations and maintain optionality.
Beyond Binary Choices
Concerning the security arena, Marcos has been reinvigorating defense ties with Washington, advancing the EDCA. Economically, Manila welcomes Chinese investment and trade while also pursuing the diversity of its partnerships. Justin Baquisal named it as ‘flexible enmeshment’ as the country strives to maintain a cautious balance. It also depicts that there is a realization in Manila that the nature and balance of great power rivalry in Southeast Asia is fluid and volatile. Instead of being tied up with rigid alignments, the Philippines is gradually diversifying its partnerships.
On the whole, from a broader perspective, the Philippines’ efforts to modulate its relationship with the US, seeking security benefits while maintaining strategic flexibility, reflect a growing trend of the US presence in the region. Meanwhile, the established economic relations between the Philippines and China, security concerns notwithstanding, represent a clear portrayal of the intertwined relationships that define contemporary global politics. Given the emerging economic and security dynamics of the Indo-Pacific, the future decisions of Manila will bear significant consequences for the stability of the region and the overall US-China rivalry.
