In an exclusive interview with This Week in Asia, Philippine Foreign Secretary Alan Peter Cayetano spoke on his country’s closer ties with China. Here is an edited transcript of the session:

On Philippines’ closer relations with China under President Duterte

First of all, our constitution does provide for an independent foreign policy. It is only by being independent that you can fight for your nation’s interests.

Then there is something innate to the president, a philosophy formed early on in life. Davao was a chaotic place in the 1960s and 1970s, so when President (Rodrigo) Duterte came … there was violence. So he said if you want peace in Davao, if you want to progress, you have to have peace and if you want peace, you have to accept people’s ideas. This carried over when he became president. If you want development – progress – you have to have peace. But if you are constantly bickering with your neighbours whoever they are, you can’t focus on progress and development. The president is a very well-read person and he saw that the dispute in the South China Sea has multi-claimants.

Asean and the art of living with China

So we do have a dispute even with Malaysia and Vietnam, but it doesn’t make sense to get in an argument so much so that it destroys our relationships. It makes less sense picking one, whether they are the bigger one or the smaller one.

The president has one law, one philosophy, one direction for everyone. If you are willing to talk and you are willing to build mutual trust and you are willing to have an avenue to discuss our differences, including our territorial and sovereignty right claims, then we are also willing to talk.

On the progress made so far

We stopped the bleeding. In the last few years people have been shouting at each other, but no one is listening to each other. If you take the Philippines’ point of view, you will understand why we were shouting. If you take the Chinese view, you will know why they were shouting … but no one was looking at anyone else’s point of view. What this led to was not only an argument with words, but it led to claimants inhabiting features where it is clear in the DOC [Declaration of the Conduct of Parties in the South China Sea] that we are not supposed to inhabit uninhabited features and not further complicate the situation.

President Duterte came in when there was a bad situation, and we are trying to make good of that bad situation. It’s like taking over a company. If you see the assets of this company and you think you can make money and you can put it on the right track, your first task is to stop the bleeding … so we focus first on stopping the bleeding, which is everyone – multilateral and bilateral – start discussing the issues [and] start getting the COC [code of conduct] on track, and not doing anything that will complicate matters.

China drew some red lines. We drew some red lines. For example, one of our red lines is building in uninhabited areas including Scarborough [Shoal]. Before President Duterte, there was no guarantee that they would not build. And our Western allies could not give us a guarantee that if the Chinese do build they would consider it an attack on the Philippines or claiming our territory. Our Western allies have always said they are with us but they do not get involved in territorial disputes.

On the other structures built by the Chinese in South China Sea

That is what I mean when I say stopping the bleeding and accepting the company. So what is the least complicated thing to do? The least complicated thing is to stop building or inhabiting the uninhabited. That is a consensus by Asean [Association of Southeast Asian Nations] and China and the individual states of Asean – the claimants and non-claimants. So everyone wants that. But when you have an argument, you have local interplay – to your constituents, public opinion, your military, your business community. So sometimes the reaction for certain claimants, not just China, [is that] the more we argue, the more I will get more features.

The more complicated one is the area where you already have features. Do we want to live with that reality? No. We are taking all diplomatic actions about it … including discussing it in bilateral and in some multilateral settings. However, we must understand that it is not something that can be solved by the Philippines and China alone.

Cuba is not a territory of the United States, but when they were putting missiles there, the US President then ordered an embargo. The former USSR reacted the same way when US and allies were putting missiles in Turkey. I am not saying that the Chinese are correct in putting defensive assets, if I may call it that, in these features. But if other claimants are doing it and the Western maritime powers are sailing left and right, and you have China who has 70 per cent of its trade coming through these sea channels … If the US was China, wouldn’t the US build its defensive posture around the South China Sea? So that’s what I am saying – President Duterte is never a hypocrite. What is good for China, is good for Russia, is good for the US and is good for the EU. You can’t say that Nato and the US have a right to national security but China doesn’t have a right to national security.

Is Duterte putting thousands out of work in Boracay to clean it up for Chinese gamblers?

The strategy of our critics is to make us explain China’s position so that we sound too pro-Chinese. The reality is that there is much that the public doesn’t know about. The US think tanks are independent in the sense that they are not Republican or Democratic, but they are for US interests and not necessarily for Asean, Philippine or regional interests. There are overlapping interests; they are our allies but not in everything. For example, when US think tanks bring up the buildings in the China-held features, but what about the features not held by China? There are other runways there. There are other militaries. We are not saying it’s correct. We are dealing with it, whether it’s a note verbale or diplomatic protest or discussion in a bilateral consultative mechanism, we are very active in this.

Two things have changed. We don’t allow this dispute to define the overall relationship of China and the Philippines. We are talking but we are drawing red lines. Before we weren’t talking but there were no red lines and might was right. But now we are being treated as a sovereign equal and we are being treated equally. And the red lines that we put on the table that China and the other claimants agreed to are being followed.

Next phase: exploration and joint development

So we are now taking the next step. How do you jointly protect the area, the environment, and how do your people benefit. The tentative fishing agreement is much easier … it is like a traffic and coordination problem.

But oil and gas is a little bit more difficult. If we can find a way to harness this without both countries or all countries giving up their claims, then we would have made the South China Sea a sea of peace and stability. Everyone wants to follow their own claims and then whether it is land territory or water, everyone is saying do this, do that, this is the right thing to do. Now and then you have someone who has a compromise that works for everyone and they will win the Nobel Peace Prize. The President has no intention to win the Nobel Peace Prize, but he is trying to drive the whole Asean and the claimants to a point where there is, will we kill each other … or will we put some rhyme and reason into this and all of us get something out of it?

On how fast the next phase can go

The exploration I think we are quite near. The development will be a little bit more difficult. As soon as they [the two presidents] said it I already called on my home office to work on a draft, a legal framework that China can agree with. If they agree, we can have the exploration right away. It could take a week, it could take six months, it could be after the visit [of President Xi Jinping to the Philippines]. I can’t see the reason why we can’t find out what is there. But in this information age, one way or the other, the information will come out, sooner or later, if you want to do this with the US, the Dutch or the Japanese. So, what’s wrong with the Chinese asking the Vietnamese, the Malaysians, us, all knowing what is under the water, how much oil and gas is there? What if there is nothing there? Then, what are we arguing about aside from security? But what if it is too good to be true? And it will really help us lower electricity prices, cost of fuel, Malampaya [gas field] will be running out in a few years … we are already one of the most expensive when it comes to energy cost.

On ensuring that the bigger neighbour doesn’t get the upper hand

Negotiations are tricky … either side walks out if you give too little or your side says you sold out. While I do believe that compromises can be based on principle, in the world of politics compromise is a dirty word. But I’ve discussed with [international] lawyers … It is very clear that you cannot divide territory … sovereignty rights by its nature is divisible because it is economic rights. It is a very good question asked by everybody be it David and Goliath and a big company or small company.

Dear God, please send the Philippines some tourists

Even if you say we are negotiating with someone who has a bazooka, even if we have a sling, it is still a sling.

The arbitration award is there. Just because we don’t shove it in the face of everyone in multilaterals it doesn’t mean it has no value. We have public opinion. And remember, China has much at stake in having peace and stability.

There are going to be sensitive parts, and emotional parts and ups and downs in talking about the South China Sea. But we already lose if we don’t try. What’s the alternative? If we follow the Aquino administration strategy, we’ll just be shouting and be heroes to the rest of the world for standing up for ourselves but they would continue building.

On Xi Jinping and Duterte’s relationship

They are two different people, but two people who deeply believe in their countries and deeply believe that they can at this juncture in history choose to be either useless or to be a game changer. And they are two people who want to find a solution to a common problem and who don’t want to fight each other. In the streets of Philippines we call the big guy a siga (tough guy). That big guy has some mutual respect for the big guy in the next street and somehow they get along.

We have been inviting President Xi … the Chinese have communicated their acceptance subject to the convenient time and we are looking towards the end of the year.