Analysing international policy processes and Lithuania’s role in them
Events Oct 09, 2023

EESC Podcast Quo vadis, China? | 3# Philippines and China: Cooperation Amidst Confrontation?

For our third podcast of the Quo Vadis China series, our Associate Expert Raigirdas Boruta spoke to Lucio Blanco Pitlo III. He is a Research Fellow at the Asia-Pacific Pathways to Progress Foundation, Philippines and Taiwan Fellow and Visiting Scholar at the National Chengchi University, Department of Diplomacy and Centre for Foreign Policy Studies, Taiwan. The discussion revolved around the relationship between China and the Philippines.

Raigirdas Boruta: Hello and welcome to “Quo Vadis China”, a podcast organized by the Eastern Europe Studies Centre. I am Raigirdas Boruta, an associate expert for the China Research Program.

Relations between the Philippines and China spanning several centuries have been predominantly warm and cordial. However, in recent years, both countries have encountered numerous issues resulting in their cooling off, hitting a low point since the Philippines and PRC established their diplomatic ties in 1975. Lately, their relations have been dominated by territorial disputes in the South China Sea, or more precisely the West Philippines Sea, which have escalated since the naval standoff over the Scarborough Shoal in 2012. Since then, new points of contention have been emerging, including China’s illegal occupation of islands, unlawful establishment of infrastructure and incidents of incursions and encroachment within the Philippines’ exclusive economic zone. Bilateral ties took another downturn when the Philippine government filed an arbitration case against China under the United Nations Convention on the Law of the Sea in January 2013, challenging the legality of China’s Nine Dash Line claim over the contested waters.

I think that my short introduction to today’s topic reflects just how complicated and multidimensional it is. And our guest who will hopefully guide me through the complex nature of Philippines-China relations and the South China Sea dispute is Lucio Blanco Pitlo III, a research fellow at the Asia Pacific Pathways to Progress Foundation in the Philippines and Taiwan Fellow and visiting scholar at the National Chengchi University, Department of Diplomacy and Centre for Foreign Policy Studies in Taiwan. Thank you for joining us, Lucio.

So, first of all, I think it would be very good to start with the dynamics of the relationship between China and the Philippines. Can you give us a short historical background? And for me, especially what’s most interesting for me is your opinion about the time of golden era of the Sino Philippine relations.

Lucio Blanco Pitlo III: Well, I’ll put it this way. There are pendulum swings in the Philippine foreign policy, especially in relation with China.  For instance, during the Gloria Macapagal Arroyo administration, there was a friendlier relation to China. Some describe it as like one of the best times, one of the best periods for Manila-Beijing relations. And then, she was succeeded by President Benigno Aquino III, and relations turned sour because of the maritime and territorial disputes. And it was one of the lowest points in the relationship. The Philippines filed a case against China in 2013. And then by 2016 there was a decision by the arbitration tribunal. The award was in favour of the Philippines, and that, of course, injected a lot of uncertainty in the relations until President Duterte, the former administration came into power and Rodrigo Duterte tried to make a soft landing given that he came to power a couple of weeks after the award. So he was in a very delicate position, not wanting to antagonize the country’s largest trade partner at a very important juncture in his office, just starting in his tenure.

So, it was considered a golden age of relations, considering that it came from a difficult path in the past six years. Under the Aquino, the third administration, some describe it as the golden age or the return of spring after a bitter winter in the relations. And so, the six years of the administration, there was a more friendly exchange between both sides.

Of course, the South China Sea remained a challenge, but both sides invested diplomacy and much energy to try to make sure that it didn’t affect overall relations. And then in 2022 came new administration, Ferdinand Marcos Jr. was sworn into office and relations are challenging to say the least because the return of the issue of the West Philippine Sea or the South China Sea. Both Duterte and Marcos said that they would not make the disputes at the centre of the relations, that it will not be the sum total of these relations. Duterte, of course, with difficulty and much criticism lived up to it.  But Marcus Jr. is having challenges in trying to contain, trying to prevent this issue from affecting the overall relations between the two sides. And it’s still too premature to say, how these relations would proceed in the next five years of the Marcos Jr. administration. But after the first year alone, we see the strains in bilateral ties and the disputes over the waters and the features in the West Philippine Sea is a major factor behind it.

Raigirdas Boruta: As I understand, the current administration seems to have a slightly different approach. And what do you think, how can you characterize Marcos’ current China policy? Does it have any similarities compared to Duterte’s policy when it comes to the South China Sea’s contentions and the Philippines’ willingness not to accentuate this issue? Is there any significant difference in the current government’s approach to China?

Lucio Blanco Pitlo III: Well, so far, what we’re seeing is that frontline maritime agencies, like the Philippine Coast Guard, have been very vocal and they are being given the platform to convey to both domestic and international public issues, concerning the incidents in the West Philippine Sea. To some extent, the foreign ministry is taking a back seat. I would say that this is quite different from that of the previous government where there’s much emphasis on dialogue and diplomacy. A bilateral consultative mechanism was established in 2016 during his first year in office, and that mechanism was about the meeting between both sides of the table at the vice-ministerial level. They met six times. Aside from that, there were also security dialogues and there was hotline communication. The Philippine and the Chinese Coast Guard also established some kind of mechanism to try to build confidence. Of course, the sea incidents continue, despite the best efforts of both sides, but I think there is a greater interest in managing and to prevent incidents from getting out in the open and making diplomacy difficult for both sides.

What we’re seeing at present is that there’s much energy and attention that the South China Sea issue is getting from the Philippine government and the level of noise, of course, already permeates, not only from the public and security and policy circle, but also in the public sphere. I think this would not contribute to improving mutual trust between both sides. And it will not contribute to steadying relations.

Raigirdas Boruta: When it comes to bilateral economic ties, China remains the biggest trading partner for the Philippines. In 2022, the trade between the two countries reached almost 88 billion U.S. dollars. What are the current dynamics when it comes to economic ties, especially, investment and trade? Are there any changes since the current President took power in the Philippines?

Lucio Blanco Pitlo III:  Correct. So, China remains the Philippines largest trade partner since 2016. And so all throughout the Duterte administration there was a marked improvement in tourism, investment and trade coming in from China. Of course, the major sector that benefited a lot was agriculture. The opening for Philippine agricultural exports, notably tropical fruits from Mindanao. They got greater access to the Chinese market with durians becoming the latest fruit to get clearance to enter the Chinese market. I think in the previous six years there was much to be said about improved economic ties and the way that the disputes were handled contributed to that. Fast forward to the present, so far, there’s been no significant adverse impact on economic relations between both sides. However, we don’t know how sustainable this dynamic is. The sea disputes will garner much attention and the toxicity that comes with it will spawn and affect economic relations. Then in a bad case, I think there’s a tendency that the agriculture would be negatively affected. I would think that because China did not shy away from economic statecraft and from using sanctions to try to express displeasure with the policies pursued by other countries, then easily substitutable goods, like bananas or pineapples. Because it’s not only the Philippines that produces these agricultural exports, so China can buy them from other countries. So, I think they stand to be adversely affected. They would be put at serious risk if relations turn sour between both sides. But other sectors that China is also in great need of, like electronics, electrical machinery, and integrated circuits, are important to China. They may not be affected that much.

So far, the relations in terms of trade investment – there are holding, but even with that, there is, of course, the risk of the increased level of noise and the attention and resources put on the issue of the South China Sea – if it’s getting too much mileage. Then I think Chinese tourism to the Philippines will also be affected and some Chinese investors may not see the country as a bright prospect compared to its neighbours in Southeast Asia. Those are the risks if these disputes will not be managed well by both sides.

Raigirdas Boruta: Given the close ties between China and the Philippines, for me as a Lithuanian, it is very interesting to ask about the weaponization of economic leverage. Does China weaponize close ties with the Philippines when it comes to economic cooperation?

Do you have any instances when heightened political tensions resulted in some very sudden restrictions on trade or bans on imports of some goods? Are there any instances of that?

Lucio Blanco Pitlo III:  Yes. These cases of economic statecraft – we are no strangers to this.   Back in 2012 we had a standoff over a feature in the West Philippine Sea known as  Scarborough Shoal Internationally, or what we in the Philippines called, Panatag Shoal or Bajo di Bisi Blok. When there was a standoff from April to May of 2012, our banana exports to China were affected. They were subjected to more stringent sanitary and phytosanitary requirements. However, the same batch of bananas was able to get into Japan and Korea, which have stricter requirements in this regard. So many consider that this was a classic case of China actually using economic tools to punish the Philippines, because of this incident in the South China Sea. At the time China was just the third largest trade partner of the Philippines, if I’m not mistaken.

Fast forward to 2016, up until the present, China has become the country’s largest trade partner. There are more strings, more economic strings, and more leverage that China can actually pool if it desires to make a point to the Philippines. Therefore, there is that concern about growing economic interdependence between both sides, the increasing reliance of the Philippines on the Chinese market. So, while expanded trade is always welcome because it would bring down benefit to the Philippines.  The business community would welcome it. But there is that concern that if we put too many of our eggs in a single basket, then there is the worry that if relations between Manila and Beijing would be affected by one issue or another, notably the South China Sea, then economic interdependence might be used against the country.

Raigirdas Boruta: Just a bit earlier, you have mentioned the arbitration case that the Philippines filed against China over the South China Sea dispute. And in 2016 the court ruled in favour of the Philippines. I would like to know, did the ruling have any effect on Chinese activities in the South China Sea, and how significant was it for the Philippines to have this ruling in favour of the country?

Lucio Blanco Pitlo III:  Well, even before the ruling came out, China already used this legal case as a pretext or as a justification to make changes on the ground. So, even if the case was ongoing, there was this expectation that the parties to the case would behave and would restrain from doing activities that would affect the area under contention. China on the contrary did the opposite. What they did was to undertake this massive artificial island building. They created this great wall of sand to the South China Sea. That affected the Philippine position adversely on the South China Sea because with this new artificial island basis China was able to patrol the South China Sea more. They can sustain more frequent and longer patrols, and they can interfere in the economic and sovereign activities of the Philippines in its exclusive economic zone, and in the resupply mission of its outpost in this practice. Even before the result came out that change on the ground already took place. When the ruling came out in 2016, the Philippines, of course,  protested these activities and tried to encourage China to comply with the outcome, the decision of the tribunal. But it was already quite a complete process. It already changed the complexion of the South China Sea in favour of China. They were able to consolidate their hold using the Philippine decision to go to the arbitration case as a justification for their action.

Raigirdas Boruta:  In this particular longstanding dispute between China and the Philippines, we can see that recently the U.S. role in this South China Sea problem has become much more prominent. What do you think, how important is the U.S. role in the South China Sea? And, could you provide your assessment of how the security cooperation between the Philippines and the U.S. progressed in recent years? I think recently we can see that the U.S. and the Philippines have greatly strengthened their cooperation in many fields. Just on September 4, for the first time, the Philippines and the U.S. carried out a joint sail in waters west of Palawan Island.

So how do you see the U.S. increased presence, and how does it affect the overall picture when it comes to the South China Sea dispute?

Lucio Blanco Pitlo III:  Well, of course, the U.S. is the country’s treaty ally. There’s a long alliance relationship between both sides. The Philippines is a former colony of the U.S. and after that there were U.S. bases in the Philippines up until the early 1990s. The incident in the Mischief Reef around 1994/1995 when China occupied the reef, which is within the Philippine exclusive economic zone. By 1998/1999, they put up more structures in that feature. That generated security concerns on the part of the Philippines.

The year after 1999, there was a Visiting Forces Agreement signed between the Philippines and the U.S. that allowed U.S. troops to go into the Philippines to undertake joint military exercises. In 2014, another agreement was inked between Manila and Washington. The enhanced defence cooperation agreement allowed for the prepositioning of U.S. assets in selected locations in the Philippines. There were five sites, five locations agreed. Fast forward to this year, it was expanded to nine sites. In 2014, there were five locations that were granted to the U.S. They can have military access to these five sites across the Philippines, one of which is in Palawan, facing the South China Sea.

This year it was expanded to nine sites. So, four additional sites: one in Palawan facing the South China Sea, three in Orden Lausanne, facing Taiwan. So, I think this is a key milestone in the evolution of Philippine-U.S. security relations. Of course, there’s increasing consultation about, the security environment and what needs to be done in order to respond to this fluid environment, and the South China Sea is a major flashpoint that both sides are trying to coordinate with. How they would respond to Chinese activities, including grey zone actions in these contested waters and features. Because the U.S. is a major security ally of the Philippines, the Philippines is considered one of the major non-NATO allies of the U.S.

The Philippines is getting support in terms of training, and joint exercises. The tempo and the scale of the exercises, the complexity, the number of activities involved, and the number of participants taking part are increasing over time. Other third states are also taking part as observers in these exercises.

These are among the developments that are taking place as far as the Philippine-U.S. alliance is concerned. We have also seen increasing security activities with the Philippines and other U.S. allies like Japan and Australia, as well as some European partners like France. These countries have increasingly paid attention to the Indo-Pacific, and some of them have come up with their own visions or strategies. Japan and South Korea are providing support in terms of maritime capacity building for the Philippines. They’re taking part in exercises including joint sails and combined maritime activities in the South China Sea. This all is needed to strengthen the so-called first island chain. The connections, are not only between the hub and the spoke, not only between the U.S. and the Philippines, but also between spoke-to-spokes. So, those are among the significant milestones in relations between the Philippines and the U.S.

Raigirdas Boruta:  Indeed, I think that just recently, the problematic nature of South China Sea reached a new height when it comes to tensions. And I think that one of the factors behind that is related to Russia’s aggression in Ukraine. For me, it’s very interesting to talk about the first reactions in the Philippines when the news broke out that Russia has invaded Ukraine and how the perception changed over time? As I said, the Philippines’ view is particularly interesting for me because the ISEAS-Yusof Ishak Institute survey report has shown that the Philippines has a very, I would say, different view compared to other ASEAN countries. And it will be very interesting to know how you see the effects of the Ukraine war? Has the perception changed?

Lucio Blanco Pitlo III:  Well, I remember when the full-scale attack on Ukraine happened, it was still in the last year of the Duterte administration. And President Duterte is known for cultivating friendly relations not only with China, but also with Russia. Surprisingly, he did say that if the U.S. wanted to have access to Philippine locations in case the war in Ukraine expands to Asia – The Philippines is open to it. And I think some may have been surprised with this pronouncement. But I guess this is indicative of close Philippine and U.S.   consultations or the assessment and appreciation of the evolving security and the risk environment in the Asia-Pacific or the Indo-Pacific. Of course, this is a product of a long-standing alliance between both sides. The fact that there are regular channels for communication and dialogue between the militaries of both sides contributed to greater support for the U. S. assessment, and the U.S. view of things, especially, on the side of the Philippine security sector. I think that the support for the U.S. Security initiatives in the region, whether in terms of increasing deterrence by providing access to certain locations that may help improve signalling and at the same time increasing these kinds of combined activities and exercises. As well as the maritime capacity building. All of this is seen as steps that are necessary to enhance the tenants because what happened in Ukraine can happen to the Asia-Pacific. Some would think that they can get away with it or that the maritime order is open for challenge. There’s not enough counterweight to provide a balance and discourage adventurism or to make certain actors think twice before undertaking disruptive moves.

Raigirdas Boruta:  The last question” I would like to know how big of an impact does the war in Ukraine has on the public in the Philippines when it comes to perceptions towards China and Russia in particular. Did it have any significant change in perception of China within the public or is it mainly connected with the tensions in the South China Sea?

Lucio Blanco Pitlo III:  The direct impact of the war in Ukraine is mostly economic. The increased prices of fuel, food, and fertilizers are because both Russia and Ukraine are major producers of grain. Also, Russia is a major supplier of energy in the world market, which affected the Philippines. Moreover, inflation was high, and the country was just recovering from the pandemic of two and a half years. And then you have this inflation brought by the faraway conflict in Ukraine far away, but the effect was felt across the world. In this part of Asia in the relations between the Philippines and Russia before the war, President Duterte tried to warm up to Russia and to discuss areas for cooperation from energy to space and defence. But, of course, the war in Ukraine changed everything. For example, before there was a deal to procure Russian helicopters, but that was ditched because of concerns about U.S. reaction to it. Other countries have tried to moderate their acquisitions of Russian arms. So, the Russian defence sector is one of the severely affected sectors because of the fallout of this. But in relations with China, the issue of the South China Sea will still be a more prominent issue affecting bilateral relations and how the Philippine public will view its big neighbour. This idea of closer China-Russia relations has less appeal for the Filipino public because they’re more aware of what’s going on in the South China Sea than what’s going on in the Russia-Ukraine war. Therefore, I think the disputes in the South China Sea would help form public and elite’ opinion in the Philippines more than developments taking place in Ukraine.

Raigirdas Boruta:  Unfortunately, the time is running out and I think there are still many topics that we could also touch upon. But I would like to thank you, Lucio, for sharing your interesting and useful insights on these really complicated, but more than ever relevant topics. I wish you a great and productive remaining stay in Taiwan and hope to see you again on our podcast or other EESC events in the near future!

You can listen to the full podcast HERE.