To address the ongoing bullying behavior of the Chinese Communist Party in the South China Sea, the Philippines is actively promoting cooperation in defense and security strategies with democratic countries led by the United States. At the same time, in order to prevent retaliation from China using economic means, the Philippines is also attempting to reduce its economic reliance on China by increasing economic and trade cooperation with Western countries such as the United States.
Philippine Secretary of Trade and Industry Alfredo Pascual recently stated in an interview with the Financial Times of the United Kingdom that economic security should be at the core of the strategic relationship between the Philippines and its allies.
Pascual emphasized the significance of economic security by stating, “This is significant because if there is economic security, we also have the ability to enhance defense capabilities. If there is economic insecurity, there are no resources to be shifted or used for defense.” He believes that the Philippines needs to boost its defense deterrence capabilities.
In recent months, conflicts have erupted multiple times between China and the Philippines in the disputed waters of the South China Sea, with Chinese coast guard vessels firing water cannons at Philippine ships, resulting in injuries to Filipino crew members and damage to ships, exacerbating tensions in the region. Philippine President Ferdinand Marcos Jr. has taken a strong stance on the South China Sea issue, striving to counter Beijing’s coercion.
Despite China being the Philippines’ largest trading partner, top import source, and second-largest export market, with friction and conflicts deepening, economic and trade cooperation between the two countries has seen a downward trend.
A report from Griffith University in Australia pointed out that compared to 2022, China’s construction investment in the Philippines decreased by 100% last year, indicating that China had no new construction projects or investment cases in the Philippines last year.
To reduce its economic reliance on China, the Philippines is actively seeking new ways to enhance its economic resilience. The Philippines hopes to not only strengthen security cooperation with the United States but also enhance economic cooperation.
During his visit to Washington D.C. last year, Marcos emphasized the need for strengthening various aspects of relations between the Philippines and the United States beyond military alliances, with a key focus being on economic and trade cooperation.
Over the past decade, the Philippines has lagged behind other Southeast Asian countries in attracting foreign investment. It is seeking funding to strengthen infrastructure and manufacturing capabilities, as well as to develop crucial mining and clean energy industries.
During a visit to the Philippines in March this year, U.S. Secretary of Commerce Gina Raimondo led a U.S. delegation and announced plans to help double the semiconductor manufacturing capacity in the Philippines, providing over $1 billion in investment. The Philippines is one of the oldest Asian partners of the United States and a strategically important non-NATO ally.
In April this year, the leaders of the United States, Japan, and the Philippines held their first trilateral summit and announced the implementation of a series of investment projects, including the launch of the “Luzon Economic Corridor” project. Through this project, over the next 5 to 10 years, the Philippines aims to reach approximately $100 billion in investment agreements with the United States and Japan, covering cooperation in semiconductors, new energy, and digital infrastructure.
Marcos attended the Indo-Pacific Business Forum (IPBF) in Manila last Tuesday (May 21), jointly organized by the governments of the United States and the Philippines. In his speech, he stated that the Indo-Pacific region accounts for one-third of global economic activities, providing excellent opportunities for the Philippines. Utilizing these economic advantages, he hopes to transform the Philippines into an intelligent and sustainable regional manufacturing hub.