Philippine Economy and the Philippines’ Rights over the West Philippine Sea and Duterte’s Inclination towards China

Philippine Economy and the Philippines’ Rights over the West Philippine Sea and Duterte’s Inclination towards China

While the pro-China inclination of the Duterte administration is clear, there seems to be inconsistency in his actions and rhetoric. Is he clever enough to manage a strategy to optimize gains from the economic superpower? At the end of this, what does Duterte truly care about?

In a 2016 survey, the majority of Filipinos (92%) still trusted the US more than China (24%). Despite Duterte's desire to adopt an independent foreign policy and distance himself from traditional allies like the US, critics argue that cutting ties from traditional allies does not equate to an independent foreign policy. Interestingly, his foreign policy is more inclined towards China, aiming to secure investments for infrastructure projects and access to lucrative export markets for Philippine goods (Woody, 2016).

In 2016, Duterte was seen as playing off China and the US to get the best deals, but this risk may have backfired, as failing to capitalize on the Philippines' victory in the arbitral case over the West Philippine Sea dispute proved costly. In May 2016, Duterte expressed his willingness to fight for the Philippines' rights over the disputed waters and to follow the arbitral court's ruling (IMOA, 2016).

In October 2016, Duterte’s planned visit to China motivated the Philippine business sector to participate. He indicated that he would remain silent on the ICC ruling if China provided sufficient aid to the Philippines. However, he insisted that neighboring countries like China are friends, not enemies, despite some investors' hesitance (Woody, 2016).

By April 2019, Duterte raised the arbitral ruling with Chinese President Xi Jinping, who consistently refused to honor it. Lorenzana, the Philippines' National Defense Secretary, commented that China’s stance on the ICC ruling would not change. As ASEAN coordinator, Duterte could influence regional views and agreements, including the Code of Conduct (COC) negotiations with China, aimed at resolving the long-standing territorial conflict. The Philippines is pushing to finalize the COC before its term as ASEAN coordinator ends in 2021.

Despite Duterte's inconsistent stances, he stated that he would confront China with the arbitral ruling if it continued to extract resources. The Philippines' strategy involves balancing relations with China, recognizing that economic ties encompass more than the West Philippine Sea dispute. Duterte's administration secured $12 billion in investments and trade agreements, generating around 21,000 jobs (Kyodo, 2019).

During the Duterte-Xi meeting, agreements were signed to fast-track major projects, with Duterte setting aside the arbitral ruling to facilitate joint exploration in the West Philippine Sea (Ranada, 2019). He acknowledged that the Philippines could not win a military conflict with China and that friendship and economic cooperation were preferable (Tomacruz, 2020). The termination of the Visiting Forces Agreement (VFA) with the US complicates potential military support under the Mutual Defense Treaty (MDT) (Orndedo, 2019).

Duterte's strategy to pivot away from traditional allies like the US and towards China aimed to secure economic benefits, but China’s failure to fulfill infrastructure promises and continued aggression in disputed waters has caused frustration. Duterte’s recent strategy involves maintaining alliances with the US, fostering partnerships with Japan, and pushing for the ASEAN-China COC (De Castro, 2019).

Negotiation principles suggest Duterte is managing well, as China’s economic and military power cannot be easily countered by legal forces. The Philippines' strategy involves trade-offs, such as compromising on the arbitral ruling for economic gains. The country’s GDP growth and improved relations with China, including emergency aid during the COVID-19 crisis, demonstrate potential benefits of Duterte’s approach (CNN Philippines, 2020).

Considering the power imbalance, the Philippines' push for the ASEAN-China COC represents the Best Alternative to a Negotiated Agreement (BATNA). Collaborative partnerships within ASEAN enhance the Philippines' negotiating position. However, Duterte must tread carefully to avoid undesirable outcomes, as China’s intentions remain unclear. Resorting to soft-balancing strategies may provide a safer path forward, with ongoing negotiations expected to reveal further developments.