As the Philippines entered midterm election frenzy, China emerged as an important issue with the opposition using the Duterte administration's China policy against his allies. Though this did not translate to electoral victory for the opposition, Duterte's friendly treatment of China was further put to the test in the middle of June when a maritime incident involving Filipino and Chinese fishermen that took place within the Philippines' exclusive economic zone captured the country’s attention.

The Busy Waters of the South China Sea

The U.S. and the Philippines began April with Balikatan 2019 military exercises, held in Zambales facing the South China Sea and a mere 90 miles away from Scarborough Shoal. This year's scaled-up exercises included simulated amphibious assault and landing exercises, an airfield and island seizure drill, as well as live fire exercises. The transit of USS Wasp , a helicopter carrier, near Scarborough Shoal en route to the exercises caught the attention of China, with the Foreign Ministry spokesperson urging the U.S. to "not stir up trouble in the calm" of the South China Sea.

The US and its partners continued to maintain presence in the South China Sea and adjacent areas, to China's irritation. The US Navy conducted several Freedom of Navigation operations in the South China Sea, challenging China's excessive maritime claims and artificial islands in the Gaven and Johnson Reefsin the Spratlys, in Scarborough Shoal, and in the Paracels.

Many other exercises were also held in the South China Sea and the adjacent waters. In April, Vietnam and India held the second iteration of their bilateral naval exercises in Cam Ranh Bay, while in early May, naval vessels from Japan, U.S., India, and the Philippines sailed together and conducted week-long drills in the South China Sea as they were en route from South Korea to Singapore for the second phase of the ADMM Plus Maritime Security Field Training Exercises.

Japan has likewise been quite active in the South China Sea this quarter, holding bilateral interoperability exercises with the Royal Canadian Navy and combat training with the U.S. Navy's Ronald Reagan strike group. At the end of June, the Japan Maritime Self Defense Force and the Japanese Coast Guard held their first joint drill in the South China Sea, off the coast of Brunei.

Australia's third Indo-Pacific Endeavour also continued through April and May, with Australian Navy ships travelling through ports of key partners in South and Southeast Asia. The Australian Navy celebrated ANZAC Day and performed shore-to-ship operations in Port Klang, Malaysia, with similar training activities and cultural engagements happening during their stops in Thailand, Vietnam, Singapore, and Indonesia. Australian naval pilots reported being targeted by handheld lasers from passing fishing vessels during their transit in the South China Sea, and a Chinese warship shadowed the Australian vessels.

In response to the activity in the South China Sea, Chinese Minister of National Defense Gen. Wei Fenghe mentioned in his speech during the 18th Shangri-La Dialogue that "countries outside the region come to the South China Sea to flex their muscles," intervening and destabilizing security in the area and leave a mess behind. He also admitted to China militarizing the South China Sea, calling it the right of a country to construct in its own territory. Earlier, on April 23, the People's Liberation Army Navy celebrated its 70th anniversary with a fleet review,  showing off 32 of its vessels, including its aircraft carrier, the Liaoning, and debuting its newest Type 55 destroyer, the largest and most advanced Asian destroyer to date.

Taiwan Strait and the Bay of Bengal 

US Navy ships also made several transits through the Taiwan Strait, provoking protests from China. Prior to the PLA Navy's anniversary, French frigate Vendémiaire also  passed through the Taiwan Strait, with the Chinese defense ministry announcing that the ship "illegally entered China's territorial waters". Canadian naval vessels that passed through the Taiwan Strait in late June were harassed by Chinese fighter jets during transit.

On May 19, vessels from Australia, France, U.S., and Japan participated in the first La Perouse quadrilateral naval exercises off the Bay of Bengal. Significant for the exercise was the deployment of the Japanese helicopter carrier-destroyer JS Izumo and the French Charles de Gaulle aircraft carrier strike group.

Prior to going to Southeast Asia, the Australian Navy fleet visited India for the second stop of Indo-Pacific Endeavour 2019, which coincided with the third iteration of third AUSINDEX. This year’s iteration of the bilateral naval exercises between the Australian and Indian navies focused on anti-submarine warfare and air defense.

Military Modernization and Defense Industry Development

The Philippine Navy recently received several assets in the past few months, including two anti-submarine helicopters and new amphibious assault vehicles. Their first missile-capable frigate, to be named the BRP Jose Rizal, was launched in May from the Hyundai Heavy Industries shipyard. The keel for the second ship of the class, the future BRP Antonio Luna, was also laid in the same ceremony.

The Government Arsenal recently received a boost as two South Korean companies launched projects for the construction of factories to supply composite-based armor products and ammunitions for the Philippines and regional markets. Across the South China Sea, the Thai government is also contemplating the establishment of similar 'special economic zones' focused on supporting defense industrial development. 

Maritime Economy and Security in the South China Sea

China's first locally-built deep-water oilrig started operations in the South China Sea in April. The China National Offshore Oil Company's (CNOOC) platform will soon start production of liquefied natural gas. Originally to be located in waters disputed with Vietnam, the oilrig was moved due to protests from the Vietnamese. In the Philippines, President Duterte released Executive Order 80 that will allow the Philippine National Oil Company Exploration Corporation (PNOC-EC) to enter into farm-in and farm-out partnerships with third parties for oil exploration, development, and production. Prior to Duterte’s Executive Order 80, PNOC-EC was prohibited from entering into such arrangements with third parties, and Energy Secretary Alfonso Cusi noted that PNOC-EC was unable to accept the proposal of  CNOOC to conduct petroleum exploration and development northwest of Palawan because of this. 

Resource harvesting activity continue, with Chinese vessels found to be poaching giant clams near Scarborough Shoal. The clam are a threatened species and were seeded by Filipino scientists in the area. Foreign Affairs Secretary Teodoro Locsin Jr. initially dismissed the issue, but eventually filed a diplomatic note after reports of the poaching were verified. 

Vietnamese fishermen have also been very active in waters around the South China Sea. In late April a Vietnamese coast guard vessel rammed an Indonesian Navy vessel in order to block its interception of Vietnamese fishermen. The Philippine Coast Guard also seized two Vietnamese fishing boats illegally fishing off the coast of Cagayan in early June.

Defense Secretary Delfin Lorenzana revealed  that a Chinese vessel had an  allision with Filipino fishermen near Reed Bank on June 9; the Chinese then abandoned the crew of the Gem-Ver after the Philippine fishing boat began to sink. Initial testimony from the Filipino fishermen confirmed that the vessel was Chinese, and that they were rescued by Vietnamese fishermen. The Chinese Embassy in Manila provided its own version of events through a Facebook post, saying that Filipino fishing boats besieged the Chinese vessel and the collision occurred as the Chinese vessel sought to escape, which contradicts the testimony of the Filipino fishermen and satellite data on the area. The Chinese Embassy later took down the post and released a new statement a day after.

For almost a week after Secretary Lorenzana first raised the incident, President Duterte made no mention of it; when he finally spoke on the issue, he mirrored the statement of Chinese Foreign Ministry spokesman Geng Shuang, calling it a "little maritime accident" and downplaying the incident. Members of the government also began sowing doubt on the Filipino fishermen's testimony, mainly focusing on the extent of the damage to the vessel. After Agriculture Secretary Emmanuel Piñol met with the crew, a dejected captain admitted that he was no longer sure of whether the collision was intentional or not.  Focus then shifted to investigating the incident, with the Chinese Foreign Ministry proposing a joint investigation for "mutually recognized investigation results". Though members of the government, including senators and the Foreign Secretary, rejected the idea, President Duterte welcomed and accepted the proposal.


President Duterte remains undeterred in pursuing closer and friendlier relations with China. Electoral victory for his allies during the mid-term elections and high approval ratings show that he remains popular despite public criticism of his soft stance towards China. While the Gem-Ver incident presented a challenge, the administration's reaction of downplaying the incident shows how much the President is willing to compromise in order to maintain his policy. This treatment of the incident starkly contrasts with the usually drastic measures and extreme statements of the president, such as withdrawing from the International Criminal Court for recalling diplomats from Canada and publicly threatening war over Canada’s exports of waste to the Philippines.

Observers would describe many Southeast Asian countries’ policy towards China as one of hedging. Hedging works when the hedger gives out an ambiguous alignment signal, neither balancing against nor completely bandwagoning with China. This ambiguous signal encourages a tug-of-war of sorts between China and countries seeking to balance against it to have greater influence on the hedger, placing the hedger in a spot where it can maximize concessions from both. To maintain this position, the hedger must continue signaling this ambiguous alignment.

A good example of a country that seems to be successful in its hedging is Vietnam, a country in a similar position as the Philippines as a claimant in the South China Sea. Vietnam also faced an incident of Chinese vessels sinking a Vietnamese fishing boat a few months ago, and continues to publicly protest Chinese harassment of its fishermen. As previously mentioned, Vietnam and India recently concluded the second iteration of their joint naval exercises, and received visits from the Commander of the US Indo-Pacific Command and the Japanese Defense Minister in April and May, respectively. Vietnam also replaced the Philippines as a leg of Australia's Indo-Pacific Endeavor for 2019. To balance this, Vietnam has made several concessions to China, including halting proposed oil drilling near contested waters with China, as well as hosting high level talks in Hanoi with Chinese Defense Minster Wei Fenghe, leading to cooperation agreements on military medicine and military staff education.

While Duterte remains secure domestically in the aftermath of the Gem-Ver incident, the administration’s reaction to the incident can be easily perceived as further moving closer to China. While that in itself is not problematic, it does bear noting that the net hedging effect is not because of any overtures by Duterte towards the United States, but because of continuation and inertia of previously institutionalized engagements within the bureaucracy, such as Balikatan and the Enhanced Defense Cooperation Agreement or EDCA. Though the new engagements with China can be seen as a correction to the excesses of the previous administration’s balancing with the U.S. against China, the absence of equilibrating actions makes us look like we are now bandwagoning with China. This lack of consistency in policy, a pendulum swinging from one extreme to another, can make us seem unreliable as partners.

Though Foreign Secretary Locsin can easily say, "f*** the international community", it would be more prudent for the government to present itself as a reliable partner that adheres to "international law and regional norms and principles", as Defense Secretary Lorenzana described the Philippines during the Shangri-La Dialogue. As the Duterte administration continues to pursue its interpretation of an independent foreign policy, calculating and recalibrating our relations with partners old and new, we should not forget that other countries are doing their own calculations and recalibrations on the basis of what the Philippines says and does.