A Chinese defense spokesperson said in a press conference June 29 that U.S.-Philippine defense cooperation "ought not to be directed at any third party, nor damage the interests of any third party" and reiterated Beijing's stance that the United States should stay out of territorial disputes in the South China Sea. The statement is in part a response to the 11-day joint military exercise by the United States and the Philippines dubbed "Cooperation Afloat Readiness and Training" (CARAT), which began on June 28 in the southwest Philippine island of Palawan. According to a press release from the U.S. military, 800 U.S. sailors, two guided-missile destroyers — the USS Chung-Hoon (DDG 93) and the USS Howard (DDG 83) — and the U.S. diving and salvage ship USNS Safeguard (T-ARS 50) are participating in the exercise. Also involved are 300 Philippine sailors and the U.S. World War II destroyer escort BRP Rajah Humabon (PF-11), the flagship of the Philippine fleet. The annual naval exercise, established within the framework of the 1951 U.S.-Philippine Mutual Defense Treaty, is intended to improve interoperability between the two naval forces and strengthen overall military cooperation between the two countries. This year the exercise takes place amid ongoing tensions with China over the Spratly Islands in the South China Sea (or the West Philippine Sea, as Manila began officially calling it in early June). The United States and the Philippines both claim the exercise was planned long ago and is part of a yearly regimen unrelated to the territorial dispute. Still, the joint naval maneuvers offer Manila some comfort following an ambiguous U.S. response to recent displays of Chinese assertiveness in the disputed waters. Tensions flared in early March after two Chinese patrol boats reportedly harassed Philippine seismic vessels near the Reed Bank (which the Philippines later renamed Recto Bank). Philippine President Benigno Aquino said in a press conference in early June that Manila had documented as many as seven incidents involving Chinese incursions into Philippine territorial waters in less than four months, including one in which a Chinese vessel allegedly opened fire on Filipino fishermen near the Quirino Atoll (known as the Jackson Atoll in the Philippines), a Spratly atoll Manila claimed as Philippine territory in late February. Beijing claimed the reported incidents were unverified or exaggerated and insisted on China's sovereignty over the Spratlys. The Philippine Department of Foreign Affairs also said it lodged two protests with the Chinese embassy alleging that Chinese naval vessels were unloading building materials and installing a number of steel posts and a buoy near the Iroquois Reef and the Amy Douglas Bank, which fall within the Philippines' 200-mile exclusive economic zone (EEZ) and are claimed by Manila. In addition, Manila has protested Beijing's plan to position a deepwater drilling platform — the 3,000-meter Marine Oil 981 — in an unspecified area in the South China Sea, and Manila claims its destination is the Spratly Islands.

 Disputes are not uncommon in the South China Sea. China became more assertive in 2007 as Beijing moved to address the country's increasing need for energy supplies and desire for territorial integration. China's change in behavior did not go unnoticed by its neighbors, but Manila's initial response was neither quick nor assertive. The Philippines opted instead to try and calm the situation, which drew domestic criticism. Manila, for example, filed a U.N. protest against Beijing's "nine-dash line" two years after Malaysia and Vietnam.

Chinese Assertiveness, Manila's Response

Early this year Manila began to shift its tactics, responding quickly and vocally to China's moves. In the days preceding Chinese Defense Minister Liang Guanglie's visit to Manila, the newly appointed head of the Armed Forces of the Philippines (AFP) cited sources claiming that Chinese jet fighters had intruded Philippine air space (a claim that proved to be untrue). Manila also sent the BRP Raja Humabon to the South China Sea — the government denied the destroyer escort was sent to a disputed area — and announced it would deploy a large Hamilton-class patrol craft, the BRP Gregorio del Pilar (PF-15), which the Philippines purchased from the United States days after the Reed Bank incident in March. 

 Philippine complaints about China have been clearly corroborated by Vietnam, another claimant in the dispute over the Spratly and Paracel islands. Vietnam recently lodged a series of complaints with Beijing after Chinese patrol boats reportedly cut the survey cables of a Vietnamese oil exploration vessel in Vietnam's EEZ. However, there is no evidence yet that Hanoi and Manila are collaborating to counter Chinese assertiveness — this could be due in part to their own overlapping territorial claims. Perhaps in a move to quell the tension, Beijing and Hanoi have reached an agreement, announced by Beijing with no explanation of the details, to pursue a peaceful solution to disputes in the South China Sea. Vietnamese officials have called for a bilateral approach to solving the issue, something Beijing clearly favors, partly because it wants claimant countries to stay divided. But Vietnam is likely playing both sides. Hanoi's temporary calm suggests a common long-term interest, shared with the Philippines, in collectively countering China. Unlike Vietnam, which has explored for oil in its EEZ and made its maritime economy a matter of national policy, the Philippines is interested in the long-term potential for developing oil and gas resources in its territorial waters. So far Manila has realized no economic gain from the disputed islands and has only established control over a few islets. Meanwhile, the Philippines' lack of large commercial fishing vessels makes it hard to exploit the contested area's wealth of fishing resources. At this point, Manila's claims in the Spratlys are aimed more at establishing territorial integrity than real economic gain. The Philippines also have a unique alliance with the United States, anchored by the 1951 Mutual Defense Treaty. Having the weakest military among Southeast Asian countries and relying on military equipment handed down from the United States, Manila cannot undertake bold military responses to China's assertiveness. But a demonstrated U.S alliance will help Manila gain diplomatic leverage in negotiations with Beijing. From the Philippine perspective, the U.S. role in the dispute is extremely important.

Courting the United States

In early June, Manila issued a statement expressing confidence that Washington would honor its commitment under the defense treaty and aid an endangered ally. The U.S. embassy responded by saying the United States was troubled by tensions in the region, reiterating the standard U.S. policy that it "does not take sides in the regional territorial disputes." During a June visit to Washington, Philippine Foreign Secretary Albert del Rosario said he wanted the United States to affirm that disputed areas in the South China Sea area fall under the defense treaty. Washington responded by saying that the United States was committed to "supporting the defense" of the Philippines and would provide it with weapons, but did not clarify whether the United States was bound by the treaty to come to the defense of the Philippines if Philippine-claimed territory in disputed waters was attacked. An American naval presence in the South China Sea fits the long-term U.S. strategy in the Asia-Pacific, particularly now that the United States has announced its reengagement policy. However, because of its multiple commitments elsewhere, the United States is not yet ready to escalate engagements in the region and is wary of confronting China directly. Manila, without a clear guarantee from the United States, must carefully calculate its current skirmish. Still, Manila can boost its territorial claim by calling on the Association of Southeast Asian Nations for assistance. The current dispute also allows the Philippines to step up its 15-year military modernization plan, which calls for reforming the AFP and upgrading its equipment. But stronger strategic ties with the United States also carry a political risk for Manila, which had walked a careful line between China and the United States. The U.S presence in the country — there are currently about 500 U.S. support personnel and advisers — has proven a contentious issue domestically, since some politicians and a substantial portion of the populace believe the long-running U.S. presence has not brought the Philippines any real benefit. Nevertheless, keeping any single power from dominating the region is a strategic imperative for the Philippines, and Manila will seek help from an outside power to prevent such a scenario. The South China Sea not only provides the Philippines a strategic supply route to enhance its security and sovereignty, but also holds the potential resources to satisfy the country's long-term energy needs. A diplomatic settlement of the territorial dispute is the preferred short-term solution, even though further skirmishes are inevitable. With the United States and China both increasingly involved in the region, the tensions are largely a test of U.S. and Chinese bargaining power. Both countries will have to exercise restraint and try to avoid miscalculations. Their efforts will influence the behavior of the smaller countries involved. The more the United States engages, the more leverage the Philippines will gain in countering China. The last thing it needs, however, is to be caught between these two giants.