What is going on?
During her last week’s visit to the Philippines, European Commission President Ursula von der Leyen delivered a keynote speech in which she directly pummeled China for challenging the global order. Speaking at the Philippines Business Forum, von der Leyen asserted that China “has yet to assume fully its responsibility under the UN Charter to uphold the sovereignty and territorial integrity of Ukraine.” She cautioned that China’s show of military force in the south and east China seas, and in the Taiwan Strait, may have “global repercussions,” while underscoring that the EU has been enhancing its engagement in the Indo-Pacific. The speech took place amid a widening chasm between Manila and Beijing under President Ferdinand “Bongbong” R. Marcos Jr.
What is the broader picture?
The period following former President Rodrigo Duterte’s rise to power marked a honeymoon period in relations between Manila and Beijing. Moving away from the hawkish China stance of his predecessor, Benigno Aquino III, the populist leader performed a reset of his country’s ties with the PRC, which was aimed primarily at securing funding for Duterte’s flagship infrastructure development program Build, Build, Build with the price tag of 160 million USD. The Duterte administration deemed China’s Belt and Road Initiative as an attractive source of funds for the projects. Moreover, the deepening of ties in Beijing took place in parallel to decoupling from the US, a process fueled by Duterte’s anti-American sentiment.
Yet, Chinese promises of lucrative economic deals remained largely unfulfilled. Additionally, China perpetuated its harassment of the Philippines Coast Guard, particularly in the vicinity of the Scarborough Shoal. The growing maritime tensions also led to the Reed Bank incident, which saw a suspected Chinese maritime militia sinking a Filipino fishing vessel. In fact, maritime tensions between China and the Philippines escalated on August 5 as the Philippine Coast Guard accused Chinese Coast Guard of trespassing in its waters and firing water cannons at its ships. Towards the end of his administration, Duterte reversed the direction of his foreign policy back towards Washington, rendering the Philippines the largest recipient of US military assistance in the Indo-Pacific region.
Consequently, the current Marcos administration largely shapes the Philippines’ foreign policy by continuing the trajectory established in the last year of the Duterte administration – rekindling positive relations with the US and distancing the country from China.
Why does it matter?
The European Union seeks to capitalize on the policy reversal in Manila as it views the Philippines as an important partner in the Indo-Pacific region.
Critically, during von der Leyen’s visit to Manila, the resumption of talks on a bilateral free trade agreement (FTA) was announced. While the EU-Philippines free trade negotiations began in 2015, they were halted in 2017 under the Duterte administration due to a rift over his human rights record and a bloody anti-drug campaign.
The resumption of trade talks signals that Brussels, and specifically von der Leyen’s “geopolitical Commission,” increasingly views the Philippines as a key political and economic partner in the Indo-Pacific. The expansion of ties between Manila and Washington, amid the cooling of the former’s ties with Beijing, facilitates this change in perception. Additionally, the Philippines is notably the world’s second-largest producer of nickel, identified as both a critical raw material and a strategic raw material, yet the exports are poorly diversified with 90 percent of them headed to China. The rerouting of exports could diminish the vulnerability faced by the Philippines, while simultaneously facilitating the process of de-risking through supply chain diversification for the EU.