Can the Philippines forgo Chinese investment for maritime security?

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In January 2019, South Korea’s Hanjin Heavy Industries and Construction closed down its shipbuilding operations in the Philippines. Hanjin represented the single biggest case of foreign investment in the country when it entered in 2006. Its ship exports have helped put the Philippines on the map as the world’s fifth-largest shipbuilding country. The Hanjin shipyard alone sits on a 300 hectare area of Subic that was the United States’ biggest naval base in the Western Pacific before it became a free-port zone in 1992. At its peak, Hanjin employed a 33,000-strong workforce.

The Philippine-US Alliance in the Maritime Domain

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The Philippine-US alliance has experienced many highs and lows from President Benigno Aquino III’s (2010-2016) historically close association with the United States to the incumbent President Rodrigo R. Duterte’s (2016-) relative distancing from Washington. While Duterte distances from Washington diplomatically, the US Indo-Pacific Command (INDOPACOM) has provided strong continuity to the close defense relationship.

Despite axing two long-standing exercise routines, the Phiblex and Carat, the US and the Philippines have managed to accommodate Manila’s concern to avoid antagonizing China by renaming, refocusing, and relocating some of the exercises to less-sovereignty sensitive waters. Refocusing exercises to security threats of non-traditional nature like disaster relief and counter-terrorism, the alliance -- on ‘life-saving’ mode -- has proven flexible and responsive to security challenges of more immediate concern to Manila. Additionally, in contrast to axing of bilateral exercises, other major drills such as the annual Balikatan and Kamandag, have been expanded, now involving Japan and Australian troops alongside their Filipino and American counterparts.

Outstanding Issues in the Philippines-U.S. Alliance

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The recent visit of U.S. secretary of state Michael Pompeo to Manila settled a long-standing concern in the Philippines over U.S. commitment to Philippine security in the South China Sea. In a press briefing with Philippine secretary of foreign affairs Teodoro Locsin, Jr., Pompeo unequivocally articulated what the Obama administration never publicly did: “As the South China Sea is part of the Pacific, any armed attack on Philippine forces, aircraft or public vessels in the South China Sea will trigger mutual defense obligations under Article 4 of the [1951] Mutual Defense Treaty [MDT].”

Article 4 expressly provides that “an armed attack in the Pacific Area on either of the Parties” would require each nation to “act to meet the common dangers in accordance with its constitutional processes.” In reference to this, Article 5 of the MDT clarifies: “an armed attack on either of the Parties is deemed to include… its armed forces, public vessels or aircraft,” as well as metropolitan and island territories.

RTD Report: ASEAN-China Cooperation in the Brunei-Indonesia-Malaysia-Philippines East Growth Area

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Background

25 years since its establishment, the geographic area covering the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) now appears to be a nexus of the subnational, national, and regional economic and security concerns facing the Philippines. On the one hand and from a local perspective, considering the Philippines’ efforts to improve development and promote peace in Muslim Mindanao with the establishment of the Bangsamoro Autonomous Region of Muslim Mindanao (the Philippine region that forms part of BIMP-EAGA), the subregional economic cooperation may help provide solutions to the problems of peace and conflict in Mindanao. At another level, such subregional integration, especially involving local stakeholders and the private sector of the countries concerned, can contribute to further ASEAN integration and in building an ASEAN economic community.