A China Coast Guard vessel manoeuvres near Philippine Coast Guard vessel BRP Teresa Magbanua near the Scarborough Shoal on February 8. Photo: PCG via Reuters
Opinion
Lucio Blanco Pitlo III
Lucio Blanco Pitlo III
Philippines counts the cost of tough South China Sea stance against Beijing
The country is seen as an unreliable destination for Chinese infrastructure investment, while tourist arrivals from the mainland have fallen
Philippine politicians and tycoons have expressed concerns about the fallout from mishandling the South China Sea row
The Philippines has become a laboratory in responding to Beijing on the South China Sea row, taking the most risk but showing inconsistency and underwhelming results thus far. Its predicament explains why other Southeast Asian claimant states remain unlikely to follow its lead. The tepid reaction to Manila’s pitch for an Asean claimants-only Code of Conduct is indicative.
As had happened in the past, lost economic opportunities and further erosion of Manila’s position in the flashpoint, relative to other disputants, may lead to a possible policy reversal in handling the maritime tiff come the 2028 presidential election.
Beijing has the most expansive claims and is most active in disrupting other claimants’ economic and security activities in the South China Sea. However, resistance against China varies depending on the risk threshold, the level of economic interdependence with the region’s largest trade partner, and the importance attached to the maritime spat and broader ties with Beijing. Chinese pressure is also unevenly applied, as other disputants are still able to exploit fisheries and hydrocarbons better and even undertake major reclamation work in contested land features. Pragmatism and realpolitik guide the policy of most Southeast Asian coastal states in dealing with China over the hotspot.
Last year, the Philippines began to expose China’s illicit actions in the disputed waters. It inserted reporters in routine patrols and resupply sorties to document interference by the Chinese coastguard and maritime militia ships. The idea is to rally local and international support and impose reputational costs on Beijing.
This approach made strides in rousing public backing for Manila’s defence build-up, a stronger alliance with the United States, and a tougher stance against China. However, it also contributed to polarising domestic politics, affecting people-to-people ties and diminishing Chinese economic interest in the Philippines. Meanwhile, Beijing remains unmoved, weathering reputational costs and continuing to wield a capacity for escalation in the South China Sea.
The Philippines’ transparency approach has yet to deter China. Quite the opposite, China has upped the pressure on its smaller neighbour. A respite came after the eighth round of the Philippines-China bilateral consultative mechanism held in Shanghai last month. After making vociferous protests, Manila recognised that it would take more than naming and shaming to stop Beijing in the South China Sea, let alone getting it to comply with the landmark 2016 ruling on their dispute by an arbitral tribunal at The Hague that ruled largely in its favour.
Growing maritime challenges have led the Philippines to embark on a major arms upgrade, including plans to acquire submarines for the first time. Manila also ramped up military drills and joint sails with the US and allies, and expanded the Americans’ strategic footprint in the country. It is negotiating a reciprocal access agreement with Japan and a visiting forces pact with France. The transparency drive gave a boost to long overdue military modernisation and revitalised alliance with the US.
Washington also met its objectives for integrated deterrence, with Manila pushing to align with broader American designs in the region. The US was given access to three sites in northern Luzon away from the South China Sea but closer to Taiwan, a hot-button issue between Beijing and Washington. The US also plans to develop a port in Batanes, the northernmost province in the Philippines, less than 200km from Taiwan.
US and Filipino soldiers train during the Balikatan drills in Zambales, Philippines, on April 11, 2019. Photo: EPA-EFE
But Manila’s approach has also created domestic fissures. Foreign policy was one area of divergence between the previous and incumbent governments. It is a factor behind the unravelling ties between the Marcos and Duterte families, two powerful political clans whose Uniteam alliance dominated the 2022 presidential election.
Mindanao, where the Dutertes hail from, is the second-largest island in the Philippines and home to the country’s biggest mines and plantations, with China a top buyer of its ores and fruit exports. The country’s commodity trade has grown in recent years due to expanded access to the Chinese market. Beijing cleared the way for the export of durians from the Philippines and has pledged to invest in a mineral processing facility. Amid rising tensions, former president Rodrigo Duterte paid a private visit to Beijing last July, where he met Chinese President Xi Jinping.
Cleavages have appeared. Senate Committee on Foreign Relations Chair and presidential sister Imee Marcos has raised questions about the locations of the new military sites for US access, citing their distance from the South China Sea. She also enquired about a huge fuel shipment from a US base in Hawaii to the former US naval base in Subic. Cagayan Governor Manuel Mamba opposed housing a US military base, saying this may impact Chinese investments and put his province in the cross hairs of a US-China conflict over Taiwan. Filipino tycoons that rarely wade into geopolitics also spoke, suggesting disquiet among the business community. Mall, property and banking magnate Teresita Sy-Coson urged restraint and diplomacy. The exposure of such fault lines may impact next year’s midterm elections.
While the Philippines’ move in the South China Sea has yet to elicit outright military action or economic coercion from Beijing, the fallout is clear. A 40 per cent Chinese stake in the country’s national grid continues to be securitised 15 years after the deal. Politics has made the Philippines an unreliable investment destination for long-term Chinese infrastructure capital. While Vietnam, Indonesia and Malaysia – the other South China Sea littoral states – have received China-led rail projects, the Philippines only have river bridges, irrigation and drug-rehabilitation centres.
During Xi’s visit to Hanoi last December, both sides vowed to upgrade the Kunming-Haiphong rail line. In contrast, Chinese funding for three rail projects discussed during the previous Duterte government is already dead in the water. China is unlikely to become a strong partner for President Ferdinand Marcos Jnr’s Build Better More infrastructure programme.
Losses in the tourism sector have also become evident. In 2019, before the pandemic, China was the Philippines’ fastest-growing tourist market, with more than 1.7 million arrivals, or a 21.1 per cent market share, just behind South Korea. Last year, as countries in Asia raced to benefit from the return of Chinese tourists, the Philippines only welcomed over 260,000 tourists from China, with the market share shrinking to just 4.84 per cent.
Passengers from Guangdong arrive at Manila airport. In 2019, before the pandemic, China was the Philippines’ fastest-growing tourist market. Photo: EPA-EFE
Ironically, for all the talk about Duterte’s China policy as appeasement, it was under his watch that the Philippines made the biggest upgrade in infrastructure in the Spratlys since the 1970s. He also invested in modernising the country’s military, procuring modern frigates from South Korea, multirole response vessels from Japan and cruise missiles from India. All these happened while relations with China remained stable.
Another irony is that while Manila celebrates every resupply mission to the Second Thomas Shoal that successfully eluded the Chinese blockade, Vietnam is busy doing substantial reclamation on its Spratly outposts and gearing for a potential second airfield, with reportedly little interference from Beijing.
These should offer plenty of insights as the strategy of the Philippines over the maritime squabble evolves.
Lucio Blanco Pitlo III is a research fellow at the Asia-Pacific Pathways to Progress Foundation
