Why you should care

As China expands its military footprint, America’s alliance with the Philippines will be increasingly important to protecting U.S. interests in a rising Asia.

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If there’s one thing we know about history, it’s that it’s only a matter of time before what was once old becomes new again.

That’s certainly the case when it comes to U.S. interests in the Philippines. As the commander of U.S. military operations in Asia, Adm. Samuel Locklear, told senators last year, the one-time Spanish colony ”remains key to our efforts to ensure the stability and prosperity of the Western Pacific.”

But then, U.S. General Arthur MacArthur was telling senators that all the way back at the turn of the 20th century. America’s governor of the Philippines and father of the famed World War II general Douglas MacArthur said back in 1902 that the archipelago represented ”the stepping stone to commanding influence—political, commercial and military supremacy in the East.”

General in uniform and hat and smoking a pipe with hands behind his back

General Douglas McArthur in the Philippines in 1945

112 years later, the Philippines may no longer be the key to influence in the East, but between its deepening security ties with the United States, a dispute with China over island claims in the South China Sea that is threatening to boil over and a suddenly booming economy, the world’s eyes are certainly on the Asian island chain like they haven’t been for decades.

Tangled Pasts

From a geopolitical standpoint, Manila finds itself smack in the middle of the cauldron of Asian maritime disputes—mostly driven by Beijing’s acquisitive appetite. And while China, India, and Singapore are all obvious choices to watch in the Asia economic boom, it is the Philippines that has been the surprise of the investing world this decade, coming in second only to China, regionally, in terms of GDP growth in 2012 and 2013. Despite the devastation of Typhoon Haiyan last November, it was the fastest the Filipino economy has grown since the 1950s . And last year, all three ratings companies upgraded the Philippines’ sovereign debt to “investment grade,” yet another sign of surging foreign commercial interest in the country and one that will make government borrowing easier.

It’s hasn’t always been a smooth ride for U.S.-Philippines relations, from American annexation in the 1890s to independence in the 1940s through the excesses of Ferdinand Marcos’ dictatorship. But bilateral ties are now on the upswing, buffeted by a shared desire to counterbalance China. The two countries’ renewed embrace will be on prominent display when President Obama heads to Manila in late April, part of a four-country swing through Asia . If all goes as planned, the president and his counterpart, Benigno Aquino of the Philippines, will unveil the details of a base sharing agreement on the archipelago that’s long been in the works. That will give the U.S. military a footprint in a critical – and tense – corner of the Asia Pacific that serves as a waterway for billions in global commerce each year.

The Asia Pivot + Strategic Priorities

Washington’s expanding relationship with Manila is all part of the White House’s vaunted “pivot to Asia” policy (first laid out in a 2011 Foreign Policy article by then-Secretary of State Hillary Clinton), and comes after several decades where crises in Europe and the Middle East monopolized U.S. attention.

3 soldiers standing by cannon outdoors looking at camera

American soldiers pose next to a captured cannon during the Philippine Insurrection.

The Philippines is still no Japan or Korea when it comes to international clout or U.S. security interests. But its geography (bounding the eastern side of the South China Sea) has boosted its strategic profile as China moves to challenge its neighbors and assert its claims over that crucial body of water —which U.S. Naval War College Professor Ronald Ratcliff dubs the ”highway for the transport of goods that enable the world’s commerce system to work.”

It is a significant step that the Philippines are saying, ’Yes, we want and welcome a larger U.S. presence.’

Specifically, China and the Philippines are sparring over who owns the Spratly Islands and nearby Scarborough Shoal—not because either outcropping is particularly desirable in and of itself , but because of potential energy resources in the seabed, below. Lacking the military muscle to stand up to Beijing on its own, Manila is instead drawing closer to the U.S. in hopes of deterring Chinese aggression and avoiding a greater conflagration. That’s something the U.S. is eager to keep a lid on, as well, given that the Philippines is a treaty ally, requiring the U.S. to come to its defense in any attack.

There’s plenty of reason, in other words, for Washington and Manila to cozy up. But Filipinos also have plenty of lingering sensitivity to any hint of colonial-style presence—a legacy that traces back to U.S. takeover after the Spanish American War. Which is why, crucially, the current negotiations between the two allies do not entertain a return of permanent U.S. military bases , which existed from the 1950s until U.S. forces were rather unceremoniously given the boot in 1991. Rather, a yet-to-be finalized agreement would allow American military personnel to rotate through shared space on existing Filipino military installations.

”It’s going to be a different sort of relationship” than the old days, says Ratcliff, a onetime naval attaché in Malaysia, noting it remains unclear what types of U.S. forces would rotate through the Philippines and for what purpose. “But it is a significant step that the Philippines are saying, ’Yes, we want and welcome a larger U.S. presence.’”

Down the Road

The future of the Filipino economy is similarly hard to call, despite the breathless attention it has received from investors and the business press.

People lined up holding a large red sign that says U.S. Bases Out

Council for National Freedom and Democracy (CONFREEDEM) demonstrates in front of the US embassy.

It’s not that it’s all hype—or one big bubble, as some have warned . In the last few years, the Filipino economy—long known as the “sick man of Asia”—has definitively busted out of a 50-year-long slump, thanks to favorable demographics (like a spike in working-age citizens), growing regional commerce and a host of business-friendly policies by the reformist Aquino, who has become a darling of the West.

But as Murray Hiebert, an expert on Southeast Asian commerce at the Center for Strategic and International Studies, warns, Aquino is limited to one term, which expires in 2016, raising the risk of backsliding under a new leader.

”We had President Ramos in the 1990s, who really was a similar sort of figure” to Aquino in his attempts to ”reform the economy and tackle some of the inefficiencies,” says Hiebert. But when Ramos left office, the country just ”went back to the same bad old days.”

Economic reform and the new basing agreement with Washington, then, are crucial plot points in what Ratcliff calls the “unfolding story” of the 21st-century Philippines. But while the United States is poised to play a role, it will ultimately be up to the Filipinos to determine if the country can maintain this new spring in its step or falls back under the weather.

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