In the shadow of Taiwan, PH faces existential choices

The Marcos government has no choice between the United States or China, amid Taiwanese tensions. It faces a choice between military buildup or economic development, against a backdrop of darkening global economic prospects.

DURING his recent meeting with President Marcos Jr., US Secretary of State Antony Blinken said the US-Philippine “alliance” was strong, but “can get even stronger.” Besides bilateral relations and the region, “increasingly, we are working on a global scale”.

It is the American national interest.

Ahead of President Nancy Pelosi’s controversial visit to Taiwan, National Security Advisor Clarita Carlos underscored Marcos’ position that the Philippines “will remain true to our one-China policy.” We have many levels of cooperation with China, mainly commercial like their Belt and Road Initiative, let’s not let them down.” This is the national interest of the Philippines.

The nuances illuminate the challenges ahead.

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“Major non-NATO ally”

Bilateral relations with the United States are based on the Mutual Defense Treaty (MDT, 1951), the Enhanced Defense Cooperation Agreement (EDCA, 2014) and the Renewed Visiting Forces Agreement (VFA, 2021). ). The United States considers the Philippines a “major non-NATO ally” – a status that a US bill seeks to formally extend to Taiwan.

In the East Asia-Pacific region, the Philippines is the largest recipient of US military aid. But allyship could drag Manila into deadly friction. In May, American NBC’s “Meet the Press” program, with the Center for New American Security (CNAS), aired a segment that imagined a war against Taiwan. In the scenario, Australia and Japan provide base access and provide forces in Taiwan, while US forces use bases in the Philippines; the only ASEAN member to become a geopolitical target (see Figure 1).

Figure 1. Philippines as target DANGEROUS STRAITS, CNAS, JUNE 2022 (CLOSE UP, SCREENSHOT)

After Blinken’s visit, the Philippine Department of National Defense (DND) said the country was ready to conduct joint patrols with the United States in the Western Philippine Sea (WPS), as part of the defense treaty. mutual, an idea that was launched for the first time. at the time of President Benigno Aquino 3rd.

Cumulatively, such military entanglements risk undermining the Philippines’ economic goal of becoming an upper-middle-income economy.

Signs of changes to come

Besides joint patrols and efforts to expand bilateral military ties, there are signs of other tangles. In April, US private equity firm Cerberus Frontier acquired the Hanjin Shipyard at the Subic Bay Freeport in a $300 million buyout. The location served as a US naval base until it was closed in 1992. Former Foreign Secretary Teodoro Locsin Jr. touted the deal as a great business way to strengthen ties with the United States.

But there is more to the story. Chaired by former US Vice President Dan Quayle, Cerberus is led by billionaire Steve Feinberg, a former intelligence adviser to Trump. According to Bloomberg, he “bought companies that refuel spy planes, train Green Berets, make sniper rifles and monitor America’s enemies from space.” Until 2021, Cerberus owned the lucrative security contractor DynCorp, which has been accused of child sex trafficking in Bosnia and damning “incidents” in several countries. And there are also more recent debacles.

On the economic level, there is the RCEP, the free trade agreement between Asean, China, Japan, South Korea and Australia. China promotes the pact, which the United States avoids. In Manila, President Duterte launched the deal because it would increase GDP by 2%. Yet it has still not been ratified by the Philippine Senate, costing the country hundreds of millions of dollars a year.

Reframed perceptions are also vital in geopolitics and often supported by national media that have been funded by oligarchs, foreign interests or both. These activities include “independent” commentators, often with close foreign ties, who promote greater Taiwan entanglement (see Figure 2).



Nuclear weapons

In the CNAS war scenario, the limited use of nuclear weapons is associated with China, which however has no history of using nuclear weapons in conflict.

The Philippines is no longer immune to such grim scenarios, thanks to policy mistakes. Last fall, a new trilateral security pact (Aukus) was launched between the US, UK and Australia, Washington and London to “help” Canberra develop and deploy powered submarines nuclear. Vehemently condemned by China, the highly controversial $66 billion deal has escalated the arms race and nuclear proliferation in Asia. It violated the Constitution of the Philippines and the Southeast Asia Nuclear-Weapon-Free Zone Treaty (SEANWFZ, 1995). Still, former foreign secretary Locsin Jr. hailed the pact against most Asean leaders, despite grim precedents in the Philippines.

During the Cold War, US nuclear warheads were secretly stored in the Philippines. In a crash in 1965, an American Skyhawk attack plane fell into the sea off Japan. Coming from the US Naval Base at Subic Bay (which Cerberus hosts), it was carrying a nuclear weapon with 80 times the blast power of the Hiroshima explosion. The Pentagon didn’t reveal the story until 1989.

A year ago, Daniel Ellsberg, the source of the Pentagon Papers on the Vietnam War, made an alarming revelation. During the Taiwan Strait Crisis of 1958, US military leaders pushed for a first-use nuclear strike against China. The Pentagon accepted the risk that the Soviet Union would retaliate in kind on behalf of its ally and that millions of people would die.

Ellsberg leaked the top-secret document to warn of new perils in Asia.

Peaceful rise of the Philippines

Not long ago, Finance Secretary Benjamin Diokno predicted that economic output would grow 10% for the second quarter of 2022. Yet the economy grew slower than expected at 7.4% (this which remains a feat under current conditions).

Projections based on national scenarios fail when the global economic outlook continues to undermine local recoveries, such as the net effect of the food and fuel crises.

Despite Bangko Sentral’s aggressive rate hike, the Philippines recorded an inflation rate of 6.4% in July. In Southeast Asia, the weight of food in the ASEAN-6 consumer price inflation basket is 20-40%, with fuel accounting for at least 50-60% of the basket. Among the major ASEAN economies, the Philippines suffered the greatest relative damage (see Figure 3).

Figure 3. Highest inflation risks in PH among ASEAN peers SOURCE: DBS (SCREEN CAPTURE)

Figure 3. Highest inflation risks in PH among ASEAN peers SOURCE: DBS (SCREEN CAPTURE)

To become an upper-middle-income economy, the Philippines must focus on economic development. As President Marcos recently said, “The Philippines will continue to be everyone’s friend and no one’s enemy. He was assisted by his security adviser Carlos stressing that “China is our partner and our friend, on the one hand, America is also our friend. We cannot choose one or the other”.

Obviously, the MDT, EDCA and VFA of the Philippines contradict full sovereignty. But the government must face cards on the table.

Efforts to engage the Philippines in regional geopolitics will intensify in the coming months. And if Republicans advance in the U.S. midterm elections, geopolitical tensions in Southeast Asia will escalate faster than expected, something the government cannot ignore.

Ultimately, the rise of the Philippines is not viable without an exclusive economic focus and a cordial but firm distance from murderous geopolitics.

The choice is not between the United States or China. It is between economic development or lethal geopolitics.

Dr. Dan Steinbock is an internationally recognized strategist in the multipolar world and the founder of Difference Group. He has worked at the Institute of India, China and America (USA), the Shanghai Institutes of International Studies (China) and the EU Center (Singapore). Learn more at

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