Monday, July 18, 2016

The Philippines’ pyrrhic victory


JULY 18, 2016

The Philippines is the last of the major parties in the South China Sea dispute to issue a statement on the Permanent Court of Arbitration’s ruling last week on its case against China. President Rodrigo Duterte, in office for less than two weeks when the ruling was issued, has cautiously said that the Philippines should not “taunt” China or “flaunt” a ruling in favour of the Philippines.

Yet, new Foreign Secretary Perfecto Yasay has been widely criticised in the Philippines for appearing contrite, even apologetic in the first press conference after the ruling.

This despite the ruling comprehensively upholding the case filed by the Philippines against China in January 2013, and deeming much of China’s claims and actions in the Philippine exclusive economic zone in the South China Sea unlawful.

Why such a sombre official tone in face of a major victory? A victory for the rules-based order weaker states depend on.

President Duterte may well see the ruling as a pyrrhic victory and an unwelcome legacy of his predecessor, Mr Benigno Aquino.

During the election campaign Mr Duterte queried the wisdom of filing the case against China given the damage it has caused to their bilateral relationship — China’s outright rejection of the tribunal and the case, and the Philippines’ manifest inability to enforce any ruling handed down.

Mr Duterte proposed a return to the approach of Mr Aquino’s predecessor, Mrs Gloria Macapagal-Arroyo.

This approach adhered to China’s favoured two-step approach; private bilateral talks uninterrupted by Chinese assertive actions in the disputed waters, and joint development of resources in these waters.

China and the Philippines, along with Vietnam, agreed to undertake joint seismic exploration for energy resources in the disputed waters during Mrs Arroyo’s term.

Like Mrs Arroyo, Mr Duterte envisaged a more equidistant relationship for the Philippines in relation to its ally, the United States and its largest source of imports, China.

Notably, China has welcomed Mr Duterte’s decisive election victory, with the Chinese foreign ministry expressing “hope that the new Philippine government will work in unison with us, veer away from the wrong path taken by the former government, return to the right track of having dialogue and consultation with China, and make tangible efforts to improve and develop China-Philippines relations”.

The ruling, and China’s predicted vitriolic response to it has made this desired return to past policies and what Mrs Arroyo lauded as the “golden moment” in Philippine-China relations very unlikely.

Any hopes of joint development appear dashed. The ruling clearly states that no feature claimed by China covered by the Philippine case is an island with attendant rights to an exclusive economic zone.

[This is a pessimistic, and inflexible interpretation. One way for Philippines to leverage on this is to tell China, "this is my EEZ However, we can have a joint exploration for energy resources, and if any is found and exploitable, China will have a stake (X%) in exploiting the resources. It is still negotiable. The ruling give Philippines a bit more bargaining leverage.]

It went further and deemed that past Chinese actions to stop Philippine energy exploration and production efforts at Reed Bank violated the sovereign rights of the Philippines in its exclusive economic zone.

Restarting bilateral talks on the dispute will also be very difficult. After the ruling, China has reiterated that any resumptions of talks between Manila and Beijing must be held on the basis of ignoring the ruling. Mr Duterte has repeatedly stated the exact opposite.

The comprehensive nature of the ruling in favour of the Philippine case and against China’s claims in the Philippine exclusive economic zone has simply hardened these positions and widened this impasse.

[Again, this simply means a bit more negotiation. Philippines now has more concessions to offer, in exchange for more "investment" by the Chinese. And China can be seen as respecting the ruling, while Philippines can be seen as working around the ruling to accommodate mutual objectives. ]

Mr Duterte would face a serious backlash domestically for any real or imagined concession to China that went against the ruling.

[Concession for concession or investment. Really! Why so inflexible?]

He has asked former President Fidel Ramos to be a special envoy for bilateral talks, and the administration’s first National Security Council meeting on July 25 will focus on the issue of bilateral talks with China in light of the tribunal ruling. Even maintaining the status quo of the fractured bilateral relationship will be difficult.

Chinese coast guard vessels have already impeded Philippine fishing boats from the fishing grounds near Scarborough Shoal.

On July 13, Chinese civilian passenger planes landed on Subi and Mischief Reefs, both determined to be only low-tide elevations devoid of maritime rights.

The tribunal ruled that China’s construction of an artificial island and runway on Mischief Reef without the prior permission from the Philippines was a violation of Philippine sovereign rights. China has yet to show signs of relenting on these activities deemed unlawful.

The new Duterte administration, which has promised to uphold the rights of Philippine fishermen, will be under pressure to publicly criticise these unlawful Chinese actions, criticisms that will likely be seen as provocative by an unrepentant China.

New Defence Secretary Delfin Lorenzana has already stated that, in light of the ruling, the Philippines will have to continue the Aquino administration’s focus on territorial defence and military modernisation, a focus in which China is the threat and the US the most important partner.

Based on the statements made by Mr Duterte since he chose to run for President last November, he clearly has a different approach to relations with China, the US and upholding the Philippine national interest than that of Mr Aquino.

The July 12 ruling strongly supports the approach taken by Mr Aquino and challenges Mr Duterte’s one. The Duterte administration may well wonder if the gain from this victory is worth its pain.


Dr Malcolm Cook is Senior Fellow at the ISEAS-Yusof Ishak Institute. The views are his own. This is part of a series on what the tribunal ruling means for other countries in the region.

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