10/15/22, 8:22 PM Hot and Cold: The Philippines’ Relations with China (and the United States) - Foreign

he United States) - Foreign Policy Research Institute

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ANALYSIS

Hot and Cold: The Philippines’ Relations with China (and the United
States)
Felix K. Chang
July 7, 2021
Asia Program

Home / Articles / Hot and Cold: The Philippines’ Relations with China (and the United States)

In spring 2021, hundreds of Chinese fishing boats gathered at several South China
Sea islets, most notably at Whitsun Reef, within the Philippines’ exclusive economic
zone. Worried that China might use the boats, which were suspected of being part
of its maritime militia, to permanently occupy the reef, the Philippines dispatched
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navy and coast guard ships to the area. When Beijing called on Manila to withdraw
its ships, Philippine President Rodrigo Duterte demurred, somewhat clumsily
explaining: “I do not want a quarrel. I do not want trouble. I respect your position,
and you respect mine… I will not withdraw. Even if you kill me. Our friendship will
end here.” His secretary of foreign affairs, Teodoro Locsin, more clearly (and
colorfully) responded to China on Twitter: “China, my friend, how politely can I put
it? Let me see… O… GET THE F*** OUT.” For a moment, it seemed as if the
Philippines was about to change its half-decade-long accommodative policy
toward Beijing.

Soon after, Duterte reverted to form. He barred Philippine government officials

from publicly commenting on the South China Sea dispute, and Locsin
obsequiously retreated from his remarks. Nevertheless, the episode put a spotlight
on the frustration among even the most China-friendly Philippine leaders. Since
taking office in 2016, Duterte has done all that he could to cozy up to China (even
declaring himself its ally). He hoped that Beijing would reciprocate by shelving its
maritime differences with Manila and helping to finance economic development in
the Philippines. Unfortunately for Duterte, China has been not only more
aggressive towards Philippine claims in the South China Sea, but also slow to
invest in new industrial and infrastructure projects.

Of course, Duterte is not the first Philippine leader to try an accommodative

approach with China. Gloria Macapagal-Arroyo also did so during her presidency
from 2001 to 2010. By contrast, Benigno Aquino III, Duterte’s immediate
predecessor, did precisely the opposite. He actively resisted Chinese
encroachments on Philippine sovereignty as president from 2010 to 2016. As a
result, Philippine relations with China have oscillated from one extreme to the
other and back again. All three presidents faced the same strategic dilemma: How
should a militarily weak Philippines deal with an ever more powerful China?
Ultimately, Arroyo and Duterte crafted their strategies based on an acceptance of
Philippine inferiority. Aquino, on the other hand, devised his by seeking ways to
overcome it. Among the most important ways included not only his high-profile bid
for the Permanent Court of Arbitration (PCA) to dismiss China’s “nine-dash line”
claim in the South China Sea, but also his not-so-glamorous work to resurrect the
Philippine military’s external defense forces.

Pitfalls of Accommodation

Certainly, the Philippine military was never a priority for Arroyo. One can argue
whether that was a cause or result of the series of military mutinies that dogged
her administration. In either case, nearly a decade of neglect significantly
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weakened the Philippine military’s capacity for external defense. By the end of her
presidency, the Philippine navy was reduced to only four operational offshore
patrol vessels (none of which were equipped for modern naval combat), and the
Philippine air force could field no aircraft capable of aerial combat.

Absent any effective capability to protect Philippine maritime claims, Arroyo

appeared to make an implicit bargain by exchanging a managed erosion of
Philippine claims for economic development assistance from China. To that end,
she devised an accord called the Joint Marine Seismic Undertaking (JMSU) that
permitted the national oil companies of China, the Philippines, and Vietnam to
cooperatively explore for energy resources in their disputed waters. The accord
was structured in a way that suggested that Manila recognized the legitimacy of
the other countries’ South China Sea claims, an admission that Beijing had long
sought. Meanwhile, she signed some 65 bilateral agreements with China in all.
Unfortunately for Arroyo, the JMSU never went into effect, running afoul of the
Philippine constitution, which bars any compromise of national sovereignty.
Moreover, her advocacy on behalf of Chinese companies, like ZTE, to build the
Philippines’ national broadband network and a commuter railway led to criminal
charges of graft against her.

When Duterte became president, he seemed to take a page from Arroyo’s

strategic playbook, albeit with visions of grander deals given the advent of China’s
Belt and Road Initiative (BRI) and the China-led Asian Infrastructure Investment
Bank. After he took office, Duterte quickly sought to befriend China. He ended
Aquino’s confrontational stance and “set aside” the PCA’s ruling, which offered
greater international recognition to Philippine claims in the South China Sea as
little more than “a piece of paper.” And, like Arroyo, he sought a deal with China to
jointly explore for energy resources in the South China Sea. He even signed a
memorandum of understanding with Beijing to that end in 2018, once again raising
the prospect of joint energy development, however legally unfeasible, in the
disputed waters.

To further demonstrate his shift towards China, Duterte announced a “separation”

from the United States. He ended joint Philippine-U.S. maritime patrols of the South
China Sea and, for a time, joint Philippine-U.S. military exercises. He also ordered
the American troops stationed in the Philippines out (a decision made easier after
a botched U.S.-supported Philippine operation against Islamic terrorists there).
Finally, in early 2020, he cancelled the Visiting Forces Agreement (VFA), which had
allowed American troops to be deployed in the Philippines. Although he has since
quietly granted two extensions to the VFA, Duterte has made no secret of his
overall aim: He wants the Philippines to have a foreign policy that is truly

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independent of the United States. (Yet, a cynic might wonder whether his tight
embrace of China would achieve any more than swapping one great-power
benefactor for another.)

Limits of Confrontation

Abroad, Aquino may be best remembered for presiding over the Philippines’ legal
victory over China at the PCA in 2016, but he architected several other notable
efforts, too. He expanded the security relationship between Manila and
Washington beyond their longtime mutual defense treaty by concluding the ten-
year Enhanced Defense Cooperation Agreement, which permitted not only a semi-
permanent American military presence in the Philippines for the first time since the
early 1990s, but also extended the two countries’ cooperation to maritime security,
maritime domain awareness, and humanitarian assistance and disaster relief.
Going further afield, he fostered closer security ties with other Asian countries, like
India, Japan, and Vietnam. Perhaps his most ambitious and least appreciated
achievement was his effort to resurrect the Philippine military’s external defense
forces. To do so, he secured the passage of legislation to reform the Philippine
government’s defense procurement process and gained support for a 15-year plan
to acquire the equipment that the Philippine military would need to mount a
“minimum credible deterrence” against Chinese incursions.

In the short term, however, Aquino believed he needed to forcefully respond to

China’s increased aggressiveness. Lacking any military capacity of his own, Aquino
leaned on the Philippines’ mutual defense treaty with the United States. No doubt,
having the world’s strongest military power as a treaty ally is useful, but complete
dependence carries its own problems because for Manila to effectively leverage
its treaty relationship with Washington, it must be sure that the United States
interprets the terms of their treaty in the same way. For example, whereas the
Philippines might view the treaty’s terms as covering all its South China Sea claims,
the United States might view them as including only the Philippines’ internationally
recognized borders. Hence, Manila has long pressed Washington to clarify its
interpretation of their treaty. Washington, thinking that ambiguity could help to
restrain Manila from taking provocative actions, has been slow to act. Given their
country’s dependence on the United States, Philippine leaders have little leverage
to push it to act any faster, a fact that has grated on them, whether pro-China or
not.

It also is one of the reasons why the plan to resurrect the Philippine military’s
external defense forces has been so important. But to reach the plan’s goals, the
Philippines has dedicated less than one percent of its gross domestic product
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(GDP) to national defense (and only a portion of which is devoted to external

defense). Indeed, Manila has allowed its defense budget to slip every year as a
percentage of GDP since the late 1990s, despite the rise of a serious challenge
from China. Small wonder that the Philippines has fallen behind on its plan. The
Philippines will have to increase its defense spending if it hopes to catch up. If it
were to spend as much on defense as Vietnam, whose expenditures top two
percent of its GDP, the Philippines could far more effectively defend its maritime
claims.

Reality Bites

Five years into his presidency, Duterte has little to show for his hoped-for bargain
with Beijing. China has made the most of the Philippines’ self-weakened position.
The massive investments that Duterte trumpeted after his many meetings with
Chinese leaders have so far failed to materialize. The only two notable BRI projects
in the Philippines are small: One involves a couple of bridges in Manila and the
other, a controversial dam, could seriously harm a nature preserve. In the
meantime, China has not tempered its pressure on Philippine-claimed features, like
Whitsun Reef, in the South China Sea. Nor has China reduced its military presence
in the region. Such slights have made Duterte’s accommodative policy look ill-
considered. On the eve of Duterte’s first trip to Beijing in 2016, his secretary of
finance, hoping to bring back tens of billions in deals and loans, magnanimously
said: “We are going to discuss with [Chinese leaders] areas of mutual interest . . .
not make them lose face over the arbitral decision.” He need not have worried;
Beijing paid it no heed.

As a result, on the edges, Duterte has eased back on his separation from the
United States. For example, he allowed Philippine-U.S. joint exercises to resume
after China occupied Philippine-claimed Scarborough Shoal. Duterte may even
have an opportunity to further clarify the terms of the mutual defense treaty
between the Philippines and the United States, given that the Biden administration
seems as though it will continue its predecessor’s harder line towards China.
Already, Washington has made clear that should the Chinese maritime militia
attack Philippine naval or coast guard ships, the United States would come to their
aid.

Even so, the best way for the Philippines to ensure its sovereignty is to more
meaningfully invest in its own national security. That means going beyond
“minimum credible deterrence.” Doing so would not only give China greater pause,
but also the United States greater confidence in its mutual defense treaty with the
Philippines. No doubt, such an investment will not be easy to make, nor will it yield
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results overnight. If Manila can work toward investing two percent of its GDP into
its external defense forces, then it can build a military capacity that is truly capable
of “credible deterrence.” At the very least, it will enable Manila to better control its
own destiny and reduce the need for dependence on any great power. Best yet, it
will expand the range of options available to future Philippine presidents so that
they can pursue relations with China that are neither too hot nor too cold, but
perhaps closer to just right.

The views expressed in this article are those of the author alone and do not
necessarily reflect the position of the Foreign Policy Research Institute, a non-
partisan organization that seeks to publish well-argued, policy-oriented articles on
American foreign policy and national security priorities.

Felix K. Chang
Felix K. Chang is a senior fellow at the Foreign Policy Research Institute.
He is also the Chief Operating Officer of DecisionQ, a predictive
analytics company, and an assistant professor at the Uniformed Services
University of the Health Sciences.

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