First, he allowed his foreign minister Teodoro Locsin Jr. to postpone the termination of the VFA. Then Manila again postponed the termination in November 2020, citing the need for stability in the region at a time of great power competition, and in June, it did so for the third time to „further examine“ the pros and cons of the deal. Finally, during US Defense Secretary Lloyd Austin`s visit to the Philippines in July this year, Duterte definitively ended his objections to the VFA and reinstated the agreement. In the first months of Duterte`s presidency, relations between Beijing and Manila have improved, although the wider dispute in the South China Sea has simmered. China has not occupied any other characteristic claimed by the Philippines or caused a stalemate with coast guards or warships, direct clashes between Filipino and Chinese vessels have decreased, and Filipinos have even been able to fish for the Scarborough shoal for a short time thanks to the informal agreement reached by Ramos during his visit to Beijing. [fn] Part of the de-escalation resulted from a recalibration of naval forces. As President Duterte continued to support the coast guard construction that began under Aquino, he encouraged the Philippine Navy to be lenient with Chinese fishermen fishing illegally and not to board their boats. See „Competitive Advantages in the Gray Area: Reaction Options for Forced Aggression Below the Threshold of a Major War,“ RAND Corporation, 2019, p.
114. However, Manila ran into trouble with another eligible state in 2017 after a warship used force against a Vietnamese boat in Philippine coastal waters, resulting in the deaths of two fishermen and the arrest of several others, leading to a diplomatic crisis with Hanoi. „Philippines assures Vietnam of `fair` investigation into fishermen`s deaths,“ Rappler.com, September 25, 2017.Hide footnote In the absence of an effective ability to protect Philippine maritime claims, Arroyo appeared to strike an implicit agreement by exchanging a controlled erosion of Philippine claims to China`s economic development aid. To that end, it developed an agreement called the Joint Marine Seismic Undertaking (JMSU), which allowed national oil companies from China, the Philippines and Vietnam to jointly seek energy resources in their disputed waters. The deal was structured in such a way that Manila recognized the legitimacy of other countries` claims to the South China Sea, an admission Beijing had long sought. In the meantime, it has signed a total of about 65 bilateral agreements with China. Unfortunately for Arroyo, the JMSU never went into effect and violated the Philippine Constitution, which prohibits any compromise of national sovereignty. In addition, his plea for Chinese companies such as ZTE to build the Philippines` national broadband network and a commuter train has led to criminal corruption charges against them.
However, measures to implement the Enhanced Defence Cooperation Agreement are perhaps of the utmost geostrategic importance. The agreement, signed in 2014 and unofficially frozen by Duterte in 2016, authorizes the United States. Military to preposition equipment, build structures and rotate forces through five designated Philippine bases: Antonio Bautista Air Base, Basa Air Base, Fort Magsaysay, Lumbia Air Base and Mactan-Benito Ebuen Air Base. U.S. military access to these bases could prove crucial in an emergency, significantly reducing Washington`s response time to any Chinese provocation or escalation in the South China Sea. These agreements represent the steady growth of bilateral trade between the Philippines and China. Today, China is one of the country`s largest trading partners with an export value of $944.23 million as of August 2019. In addition, it also brings the highest value of imported goods to the country with a share of 23.1% of total imports in August 2019.La China is also one of the country`s leading investors with investments that reached $980 million in 2018. Since 1975, diplomatic relations between China and the Philippines have continued to develop. Over the years, several bilateral agreements have been signed to strengthen cooperation and mutual trust.
In 2018, bilateral trade between the two countries amounted to $55 billion. The legal dimension of possible cooperation at Reed Bank is particularly complex, as the area is in the nine-dash line, raising concerns about sovereignty and sovereign rights. The exploration framework, in accordance with domestic legislation, focuses on the service contract model, where a Philippine company or a foreign company can enter into a contract with the Philippine government. [fn] Any agreement should take into account the Philippine Benefit Allocation Act. The Petroleum Exploration and Development Act of 1972 stipulates that the Philippine government must retain 60% of net profits, 40% of which goes to the entrepreneur. Article XII of section 2 of paragraph 1 of the 1987 Constitution provides that „the exploration, development and exploitation of natural resources shall be under the control and supervision of the State“. But with the 2016 decision establishing that Reed Bank`s territory is clearly in the Philippine EEZ, an agreement on joint exploration under this model should maneuver around sovereign litigation. .