Thayer Consultancy Background Brief

ABN # 65 648 097 123

South China Sea: Does the
Philippines Have a Strategy?
April 30, 2018

We are preparing a report focusing on the Philippines’s strategy in handling maritime

disputes in the South China Sea. We request your assessment of the following issues:
Q1. How would you compare the Philippines via-vis other claimants in the Spratlys in
terms of asserting its claims in the South China Sea? And in terms of development of
bases in the South China Sea?
ANSWER: There are four Southeast Asian claimant states with claims to the South
China Sea. They fall on a scale of most assertive – Vietnam – to least assertive –
Philippines, Malaysia and Brunei.
Vietnam is the most vocal in public in defending its claims to the Paracels and its
twenty odd features (rocks) in the Spratlys.
Under President Duterte the Philippines has put aside its landmark win by the Arbitral
Tribunal established under Annex VII of UNCLOS. But officials from time to time
express reservations if not disquiet about Chinese activities in the West Philippines
Sea.
Malaysia adopts a very low profile even while Chinese Coast Guard ships linger around
Malaysian features in support of Chinese fishermen.
Brunei invariably remains silent both in public and within ASEAN.
Vietnam’s occupation and low-level militarization of 21 features in the Spratlys
extends back to the colonial era. Communist Vietnamese forces displaced soldiers
from South Vietnam in the Spratlys in 1975 and have gradually militarized these
features, especially in the last three or four years.
The Philippines, which occupies nine features, and Malaysia, which occupies five
features, both maintain airstrips and a low-level military presence. But none of these
activities compares in scope and scale to the militarization China has carried out on its
seven artificial islands.
The Philippines exercises a form of self-restraint in allowing some of its facilities to fall
into disrepair and in not undertaking new construction to keep China from exerting
diplomatic pressure.
Q2. Vietnam is now the most vocal of the claimants opposing China in the South China
Sea. How would you compare the strategy of Vietnam and the Philippines in handling
the sea dispute - militarily and diplomatically?
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ANSWER: If strategy is viewed as ends (ultimate objectives), ways and means, Vietnam
has the most advanced political-military strategy. It has undertaken a robust
modernization of its armed forces since the mid-1990s, developing modern air, naval
and missile forces. These serve mainly as a deterrent.
Vietnam also has developed a strategy of cooperation with China where its interests
are not adversely affected and struggling against China when its interests are
threatened. This strategy encompassed diplomatic protests, public comments by
Foreign Ministry spokesmen and joint statements with relevant countries like Japan,
India and the United States. Vietnam supports a U.S. naval presence and endorses U.S.
freedom of navigation patrols in the South China Sea.
It is difficult to discern the Philippines’ strategy. It is clear President Duterte is vocal
about how the Philippines cannot stand up to China. Duterte depreciates the alliance
with the United States. The modernization of the Armed Forces of the Philippines,
initiated by the Aquino Administration, continues but at a slower pace. It is not
comparable to Vietnam’s robust force modernization. Philippine diplomacy does not
seem to have clear direction on this issue.
Q3. How would you assess the Philippines’ seeming inaction on China’s construction
of facilities, the presence of jammers, landing of military planes within the Phillippines’
Exclusive Economic Zone? What is the worst scenario if the Philippines continues to
appear to yield to China?
ANSWER: There are some public signs that Philippine officials are concerned about
such activities and have been more vocal this past year. But expressions of concern
appear scattered and uncoordinated.
In the lead up to the 32nd ASEAN Summit in Singapore, the Philippines made three
interventions on the wording of the South China Sea section of the Zero Draft
Chairman’s Statement. For example, in point 15 of the Chairman’s Zero Draft, the
Philippines requested that the document mention “serious concerns” on land
reclamation and escalation of activities such as “massive” island building, construction
of outposts and deploying of military assets in disputed areas.
Second, the Philippines joined Indonesia, Malaysia, Singapore and Vietnam in
requesting that “full respect for legal and diplomatic processes,” a reference to the
Arbitral Tribunal, be included in point 16.
And finally, the Philippines and Vietnam requested that Point 17 welcome “the
issuance of the 12 July award by the Arbitral Tribunal constituted under Annex VII to
the UNCLOS.”
Because of ASEAN’s norm of consensus (and a record sixteen interventions, including
seven by Cambodia) all of these requested amendments were deleted. Of seven points
in the Zero Draft, only one was retained.
At present there are no good scenarios only least bad. The worst for the Philippines
would be for China to occupy and build on Scarborough Shoal. Next, the Philippines
will have to decide what to do about Second Thomas Shoal where the beached LST is
decrepit. No action means that the Philippines will have to withdraw the marine
detachment eventually and China will assert control over this feature. I
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The bottom line is that China will end up dominating the South China Sea and dictate
the terms of military activities and resource exploitation. To quote the Melian
Dialogue, "the strong (China) do what they can and the weak (Philippines) will suffer
what they must." This is what can be labelled the “new colonialism.” Instead of
occupying land and subjugating the people as during the Spanish era, China builds on
the water to extract its resources and to dominate the land from its artificial islands.
Q4. Can you also comment on Vietnam’s economic strategy? It's also a partner of
China but it does not yield to the interests of the latter when it comes to the territorial
dispute, a contrast from the Philippines's strategy. What about economic relations?
ANSWER: Vietnam is one of the fastest growing economies in the Asia-Pacific with a
growth rate at or around 6.7-7 percent. Vietnam’s follows of a strategy of active
proactive international integration, that is, to join all relevant multilateral economic
organisations, push Vietnam’s agenda in these organisation, and negotiate as many
free trade agreements as possible. It has one with Eurasian Economic Union (Belarus,
Kazakhstan and Russia,) and is negotiating with the EU.
The Vietnam Communist Party has set as one of its priorities raising the contribution
of the private sector in what its calls Vietnam’s “socialist market economy.” Vietnam
was an ardent supporter of the Trans Pacific Partnership (TPP) and agreed to
undertake internal market and labour reforms. Trump’s withdrawal from the TPP was
a shock for Vietnam because the United States is its largest export market (while China
is its largest trade partner).
Vietnam has a trade surplus of around US$30 billion with the United States and ranks
sixth on the list of countries having a surplus after China that tops the list. At the same
time Vietnam has a trade deficit of US$32 billion with China. Vietnam presses China
for greater investment in Vietnam and for greater market access for Vietnamese
businesses. At the same time Vietnam attempts to reduce its trade deficit with China,
a hard task.
Vietnam wants the U.S. to designate it as a market economy. At the moment the US
and Vietnam have a working group to study this issue. Also, under Trump, Vietnam
has agreed to discuss a free (fair and reciprocal) trade agreement with the United
States.
The bottom line, Vietnam has been quite pragmatic in adopting market reforms. It
takes advice from all corners including the World Bank and International Monetary
Fund. It will continue to pursue active and proactive international economic
integration. In this respect Vietnam is part of the ASEAN-initiated Regional
Comprehensive Economic Partnership to expand ASEAN’s free trade agreements with
six bilateral partners into a web including all ten ASEAN states and its six partners.

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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.