The United States and the Philippines have had a security alliance since 1951, when the two countries signed the Mutual Defense Treaty between the Republic of the Philippines and the United States of America. According to the U.S. Department of Defense, the U.S.–Philippine alliance is a key factor in maintaining stability in the Indo–Pacific—and is ready to build on the progress of the past three years.REF In 2023, the U.S. and the Philippines established the Bilateral Defense Guidelines to reaffirm the Mutual Defense Treaty, drive unity of effort within the alliance, and guide priority areas of defense cooperation.REF
Threat Environment: The South China Sea
The South China Sea (including the West Philippine Sea) is a threat environment with significant potential for escalation. China has laid claim to much of the sea using its nine-dash line, which overlaps with claims made by the Philippines, Vietnam, Taiwan, Indonesia, Malaysia, and Brunei.
Extending from the rocks and shoals that it has turned into a man-made archipelago of military garrisons, China claims an exclusive economic zone (EEZ) over the better part of the South China Sea, and then makes claims beyond what is standard in international law about what its rights are within that EEZ. China claims that foreign militaries cannot conduct intelligence gathering within its EEZ, whereas the United States (and most of the world) claim a freedom of navigation through EEZs under the United Nations Convention of the Law of the Sea (UNCLOS).REF The United States therefore conducts routine freedom of navigation operations (FONOPS) in the South China Sea, both to signal American commitment to freedom of navigation and to signal that the United States does not recognize China’s unlawful claims extending from rocks and shoals.
China has been engaged in increasingly aggressive coercive action aimed against the Philippines as part of the dispute over a series of shoals that are located to the west of the Philippines. In 2016, the Permanent Court of Arbitration in The Hague ruled in favor of the Philippines in this dispute, stating that the majority of the shoals belonged to the Philippines and that China had violated UNCLOS through its action against the Philippines in the region. Although China is a signatory to UNCLOS and has ratified the treaty, it has ignored this ruling. As then-Secretary of State Mike Pompeo put it in an official statement in 2020, “Beijing’s claims to offshore resources across most of the South China Sea are completely unlawful,” and China has “no legal grounds to unilaterally impose its will on the region.”REF
China’s Illegal, Coercive, Aggressive, and Deceptive (ICAD) Activities. China has been increasing its ICAD activities (more commonly but less precisely known as “gray zone” activities) against the Philippines over the past several years.REF In June 2024, Chinese speedboats attacked a contingent of Philippine sailors on their way to resupply the Philippine contingent aboard the rusting BRP Sierra Madre, which has been grounded on Second Thomas Shoal since 1999. The Chinese Coast Guard intercepted the Philippine sailors, attacking them with machetes, knives, and hammers, injuring some of them—one Philippine sailor lost his thumb.REF China engages in coercive actions against other South China Sea nations as well, especially against Vietnam. In October 2024, Chinese vessels boarded a Vietnamese fishing ship and assaulted its crew, leading Vietnam to issue a statement condemning the “brutal behavior of Chinese law enforcement forces towards Vietnamese fishermen and fishing vessels operating in the Paracel Islands area of Vietnam.”REF The results of these actions have not been entirely in China’s favor, as public opinion in the Philippines (and elsewhere) has been galvanized against China, and Philippine policymakers’ resolve to stand firm in the dispute has been strengthened.
Comprehensive Archipelagic Defense Concept
The Philippines is in the early stages of implementing a new national security strategy that is geared toward external threats to Philippine sovereignty. Implementing this new strategy will require shifts in force posture and defense spending.
Historical Framing. Traditionally, the Philippine military has been geared toward internal security operations. This made sense, both because of the recurring domestic insurgencies in Mindanao and because, for the duration of the Cold War, a large American military presence was permanently stationed in the country, until 1992, at Subic Naval Base and Clark Air Force Base.
Strategic Concept and Funding. The Comprehensive Archipelagic Defense Concept (CADC) is the new joint strategic concept of the Philippines, adopted by the Bongbong Marcos Administration in early 2024 and currently being implemented by the Philippine Department of National Defense.REF The strategy is intended to make the Philippine armed forces far more outward-looking, with integration of land, air, and naval capabilities into joint operations another key part of the plan. Internal security operations that were previously conducted by the Philippine Army and Philippine Navy will now be conducted by the Philippine National Police and Philippine Coast Guard, as the priority mission of the Armed Forces of the Philippines will be to defend the sovereignty and territorial integrity of the Philippines.REF
Historically, the Philippine Army has been the nation’s pre-eminent service, and spending was focused on enabling the army to conduct counterinsurgency operations internally, which often left the Philippine Navy underfunded. To their credit, Philippine strategic planners have recognized that they need to increase funding to the Philippine Navy, and also to reallocate funding toward new capabilities within the army if they are to implement the CADC. Other countries, such as the United States, Australia, and Japan, are currently undergoing this strategic shift in defense spending as well. In terms of planning, the strategic realignment of the Philippine Army is similar to recent shifts in strategy for both for the U.S. Marine Corps and the Australian Army. The United States and Australia have both recognized that their land forces will need to adapt their spending and planning if they are to meet the challenge of deterring China in the Indo–Pacific. The United States Marine Corps is implementing this shift in thinking within the framework of Force Plan 2030. The Australian Army is shifting to a focus on littoral combat operations, and the U.S. Army Pacific is deploying new systems, such as the Multi-Domain Task Force (MDTF), to the Philippines and elsewhere that are intended for littoral combat operations.REF At the same time, Japan is also shifting forces to the southwest islands and investing in littoral combat capabilities similar to those in which the United States and Australia are investing.REF The efforts of the Philippines to adjust its strategic planning and funding falls well within the mainstream of America’s Indo–Pacific alliances and partnerships.
The Philippine government is increasing defense spending, but not at a rate fast enough to meet its modernization goals.REF The defense budget of the Philippines is small in comparison to that of other U.S. allies and partners, and the Philippines will need to increase its defense spending substantially if the Philippine government is to deter Chinese aggression in the South China Sea. The Philippines’ defense spending stands at only 0.896 percent of gross domestic product (GDP).REF The United States spends 3.38 percent of GDP, and Japan spends 1.6 percent of GDP. Philippine defense spending as a percentage of GDP is less than that of every North Atlantic Treaty Organization (NATO) member.REF It makes sense for the Philippine government to keep economic development and increasing the standard of living as its primary goals, but the recent actions by China against Philippine service members, fishermen, and sovereignty show that a significant increase in defense spending is necessary. NATO members have a defense spending goal of 2 percent of GDP, and Japan has adopted this target as well. The Philippine government will also need to raise its defense spending goal to 2 percent of GDP if it is to afford the modernization and expanded capability laid out in the CADC strategy. Nevertheless, the Philippine government deserves credit for having doubled the defense budget over the past decade and for sending clear signals that it plans to continue to increase investment in its own security.REF
The Philippine Role in Regional Security
The Philippines has the opportunity now to act more as a middle power than as a small one. The GDP of the Philippines, around $437 billion, is larger than that of Vietnam or Malaysia, and with 118 million people, it has one of the larger populations in the region.REF From the American perspective, the more capable the Philippines is at defending its own sovereignty, the better. The United States is trying to balance multiple security commitments worldwide and has suffered from strategic distraction over the past several decades as it ignored the rise of China and the return of great power competition. Many in Washington, including The Heritage Foundation, are now calling for the United States to prioritize the Indo–Pacific as the primary strategic theater, and are working to achieve a rebalancing of resources and assets into the Western Pacific that will provide a stronger deterrent effect against China.REF Concurrently, it will be incumbent upon America’s allies and partners to increase their own military spending and military cooperation with both the United States and with each other.
Prospects for Military-to-Military Collaboration
The collaboration between the United States and the Philippines has grown. Allied throughout the Cold War,REF the salience of the U.S.–Philippine relationship waned in the 1990s and early 2000s.REF In recent years, however, the relationship has reinvigorated with a focus on containing the threats posed by China.REF Today, cooperation takes the form of purchases of military equipment from the United States, joint naval and amphibious exercises, as well as the deployment of U.S. Army intermediate-range missile forces. These exercises and missile deployments serve two purposes—to help the Philippines create a more capable (and therefore, credible) military that can operate with U.S. forces and to demonstrate to China that, should China prosecute a conflict within the region, it would have to contend with an increasingly capable and lethal military operating from the Philippines. The United States has already recognized the importance of enhancing the capabilities of the Philippine armed forces and recently supplied the Philippines with $500 million in Foreign Military Financing as part of the fiscal year 2024 Indo–Pacific Security Supplemental Appropriations Act.REF Philippine Defense Secretary Gilberto Teodoro welcomed the funding, saying that “every peso or dollar spent on hardening Philippine capabilities to defend itself and to deter unlawful aggression will be a plus against any threat actor, whether it be China or anyone.”REF This financing is just one component of a much broader security arrangement being implemented by the United States and the Philippines, much of which was laid out in the Joint Statement on the Philippines–United States Fourth 2+2 Ministerial Dialogue in July 2024—the first in Manila. This sort of investment by the United States in Philippine infrastructure will of course also have a positive economic effect on the Philippines, stimulating economic growth and job creation.REF The improved infrastructure will also make it easier for the U.S. military to deliver humanitarian aid after a natural disaster, as it has for decades.REF
In many ways, the littoral nature of the Philippines itself make it an attractive partner to the U.S. military. The thousands of islands, inlets, channels, and bays make it an ideal place from which the United States or the Philippines could operate and greatly complicate Chinese war plans. Its bays and islands provide shelter for hidden swarms of small boats, drones, aircraft, and missiles that could harass or directly interdict the Chinese military during times of crisis. With Manila’s permission, a U.S.-led coalition could target Chinese naval and air forces for hundreds of miles around the Philippines—including most of the Philippine Sea and West Philippine Sea—and be able to strike positions along the Chinese coast. The overall effect is to make it too costly for China to initiate hostilities with the Philippines.
Philippine collaboration with the United States could be expanded to include extending the stationing of U.S. forces in the Philippines on a rotational basis and the expansion of integrated air and missile defenses, designed to not only protect the Philippines but to deny China the ability to control the skies and seas in and around the Philippines.
The United States and the Philippines have an agreement known as the Enhanced Defense Cooperation Agreement (EDCA), which allows the United States to build and operate facilities on Philippine military bases and rotate troops through these bases. Currently, the U.S. military has access to 10 Philippine military bases as part of the EDCA, with the Philippines maintaining sovereignty over the EDCA sites. The U.S. and Philippine militaries deployed troops from these bases as part of the 2024 Balikatan exercise to test their effectiveness and unit interoperability.REF
As part of the 2024 Balikatan exercise, the U.S. Army deployed the Typhon missile system, a land-based weapon that can launch medium-range land-attack cruise missiles and air-defense missiles, to the Philippines.REF The versatility of the Typhon enables it to launch munitions that can hold at risk land-based targets on the Chinese mainland or surface ships. By coupling the range of such munitions (which can engage targets more than 1,000 miles away) with the Philippines’ strategic location, a U.S.-led coalition could engage targets from the East China Sea to the Philippine Sea to the Taiwan Strait to the Strait of Malacca to the Chinese mainland. These high-end capabilities, operated jointly in coordination with the U.S. military, would be one of the “crown jewels” capability-wise for the Philippines and would be part of the “Lamborghini” mix for the Philippine armed forces.
Integrated Air and Missile Defenses. American forces operating in the Philippines should increase the rotational capabilities of integrated air and missile defense capabilities, including the Terminal High-Altitude Area Defense (THAAD) systems and short-range air defenses (SHORAD). Systems such as THAAD, currently deployed at key U.S. and allied military bases around the world, have proven to be incredibly effective at intercepting a variety of air and missile threats. From ballistic missiles, cruise missiles, and shorter-range rockets and drones, these types of missile defenses not only protect civilian population centers and key military installations, but also create air defense bubbles that become “no-go zones” for enemy aircraft and missiles. THAAD, placed within the region, would complicate Chinese air force operations by limiting the areas in which they could maneuver and from which they could launch strikes. THAAD, a high-price ticket, would be augmented by SHORAD capabilities, a relatively low-cost defensive weapon type that is effective against low-altitude air threats, such as helicopters or low-flying aircraft. SHORAD systems include shoulder-fired surface-to-air missiles, machine guns, and anti-air missiles mounted on various military vehicles.
Taken together, these systems can create an interlocking web of high-end and low-end missile defenses and key locations that significantly affect Chinese operations and decision-making within the region.
The Philippines should also seek to expand its cooperation with two competent, modern militaries within the region, namely Japan and Australia.
Both nations are modernizing their maritime and air forces and restructuring their militaries against the Chinese threat. Japan is planning to double its military spending over the coming decadeREF to field a military armed with advanced fighter aircraft, highly capable naval ships, and a variety of surface-to-air missiles, anti-ship missiles, coastal defense missiles, and land-attack cruise missiles.REF All these capabilities are part of a larger plan designed to field a military that is built for the purposes of deterring Chinese military power in the Western Pacific. Similarly, Australia is investing in fast-attack submarines,REF long-range fires, fifth-generation aircraft, electronic-warfare capabilities, and a similar mixture of long-range and stand-off fires designed to not only deny China the ability to impose its will militarily in the southwest Pacific, but also to give the Australian military the ability to deploy to the West Philippine Sea and the South China Sea.REF
Consequently, the Philippines should seek to expand its military exercises to include Japanese and Australian forces, as it is very possible that, should conflict arise in the Western Pacific, the Philippines would join a U.S.-led coalition that includes Japanese and Australian forces. Such military exercises should include combined naval drills, defensive counter-air operations, and amphibious operations to seize contested islands. Again, such exercises would not only give the Philippine military operational experience and experience in working with regional partners during military operations but would also present a more credible deterrence posture.
Regional Diplomacy
The Philippines is a member of the Association of Southeast Asian Nations (ASEAN), a regional grouping that includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Many of these countries have also been subjected to coercive diplomacy by China, and the grouping serves as an important forum for establishing regional norms.
The Philippines provides an important voice within ASEAN, speaking against Chinese pressure campaigns in the region and in favor of the sovereignty of individual member states. The Philippines has provided important diplomatic support to Vietnam, in particular, which has been targeted by China almost as much as the Philippines in recent years, and far more so in decades past. Vietnam has likewise recognized the Philippines’ claim at the United Nations to an extended continental shelf in the South China Sea.REF The two nations signed two agreements in early 2024 to enhance maritime cooperation bilaterally and within ASEAN, with the bilateral agreement including cooperation between the Vietnamese and Philippine coast guards, including capacity building, training, and personnel and ship exchanges.REF
One important step the Philippines could take is to resolve its territorial disputes with other Southeast Asian nations and encourage them to resolve their territorial disputes with each other to project a more unified front against Chinese claims over the South China Sea. These and other efforts by the Philippines show that ensuring a free and open Indo–Pacific is not an exclusively American issue—far from it. Instead, it shows that all countries in the region have a vested interest in deterring China from using military force to resolve territorial disputes in the region, and that countries like the Philippines and Vietnam take their sovereignty seriously.
Foreign Military Sales and Aid
Asymmetric warfare is not anyone’s preferred choice, and most governments prefer to buy large, flashy weapons systems, such as tanks and submarines. However, when a smaller country is threatened by a much larger and wealthier country, asymmetric warfare becomes the most strategically sound choice. Ukraine has overperformed in the defense of its sovereignty against the much larger Russian military because it has focused on buying large numbers of anti-armor, anti-air, and anti-ship missiles, along with large numbers of cheap drones, that have negated Russia’s advantage in wealth, personnel, and equipment.
Likewise, the strategically sound choice for the Philippines, faced with Chinese aggression, is to focus defense spending on large numbers of cost-effective anti-air and anti-ship capabilities, and a relatively smaller amount of spending on larger, more expensive weapons systems. The Philippines should resist the temptation of buying too many prohibitively expensive, big-ticket procurement items and focus the majority of new funding on cheaper asymmetric capabilities. The Philippine armed forces could be a military with a handful of Lamborghinis surrounded by a fleet of Toyotas, well-equipped to defend its sovereignty.
In practice, what would such a military look like? To begin with, the Philippines should focus on its comparative advantage of being an archipelago nation with thousands of islands, inlets, and bays, giving it the ability to serve as a base or a launch pad for long-range strike, integrated air and missile defenses, anti-ship capabilities, and small arms.
Anti-ship Capabilities. The Philippines recently made a significant investment in anti-ship capabilities with the $375 million purchase of BrahMos cruise missiles from India.REF The Philippines should continue to acquire anti-ship missiles and smart torpedoes that have proven highly effective at destroying naval threats. Such missiles include low-altitude, sea-skimming guided missiles, longer range surface-to-surface guided cruise missiles, or high-speed anti-ship ballistic missiles. Such capabilities have been used in combat for decades and are highly effective at both holding enemy naval forces at risk and evading missile defenses. Smart mines are a developmental naval mine that will be able to launch torpedoes at enemy ships when they are detected, damage enemy ships directly, or disrupt operations by forcing adversaries to avoid key waters or to engage in time-intensive and costly mine-sweeping measures. These mines could be deployed pre-conflict and then activated on order, once a conflict begins.REF Being able to mine the waters immediately around the Philippines could not only help to turn the archipelago into a bastion, but also significantly affect the Chinese navy’s ability to project naval power into the theater and severely hamper China’s ability to threaten sovereign Philippine territory.
Fast-Attack Boats. The Philippines’ many islands and inlets make it a perfect base for large amounts of fast-attack boats armed with machine guns, rocket-propelled grenades, and short-range anti-ship and anti-air missiles. Such fast-attack boats—similar to the ones that Iran operates in the Strait of Hormuz—can play an important role in harassing and attacking adversary surface fleets in confined waters—such as those found in and around the Philippine archipelago and in the Western Philippine Sea.
Philippine Air Force F-16s. One of the higher-end capabilities the United States should sell to the Philippines is the F-16 fighter jet. The Philippines is extremely interested in acquiring these jets, and the approved sale would go a long way toward building the relationship and signaling the high esteem in which the United States holds the alliance. Far less significant partners of the United States already operate the F-16, and the sale would be seen as a gesture of goodwill by the United States. Negotiations have stalled over the cost of the sale, and the United States should consider some flexibility in the financing of the sale, perhaps including it in a future military aid agreement along with enhanced access and infrastructure investments at EDCA sites.
The acquisition of F-16 aircraft by the Philippines would strengthen the ability of the Philippine Air Force (PAF) to defend Philippine sovereignty against encroachment in the West Philippine Sea. The PAF would need to conduct extensive joint training and exercises with the U.S. Air Force as part of the acquisition, and a significant amount of additional investment would be needed to upgrade the facilities at whichever air base the PAF decided to station the aircraft at (likely Basa Air Base). These infrastructure improvements would have a positive effect on the U.S. military rotating aircraft through the base and conducting operations.
Recommendations for U.S. and Philippine Policymakers
In order to strengthen the U.S.–Philippine alliance, the United States should:
- Continue to deploy key anti-access/area denial (A2/AD) assets to the Philippines, including the Typhon missile system and THAAD. To facilitate this continued deployment, the United States will need to work with the Philippine government to maintain and expand U.S. access to EDCA sites and will further need to invest in infrastructure for hosting U.S. troops at these sites.
- Prioritize its Indo–Pacific alliances. The various supplemental military aid packages throughout the course of the Biden Administration have included military aid and foreign military financing and sales for Indo–Pacific allies almost as an afterthought, with the bulk of funding going to Europe. Given that China has been identified as the primary challenge to U.S. national security, U.S. foreign military financing and sales should instead focus on countries in the Indo–Pacific that are critical to deterring China—such as the Philippines.
- Help the Philippines to finance the purchase of F-16s. The United States should explore different financing options for selling the F-16 fighter jet to the Philippines, including making the sale part of a military aid deal. Included in the deal should be a U.S. plan to rotationally base U.S. Air Force F-16 squadrons at an EDCA site in the Philippines to train with the new Philippine F-16 squadron.
The Philippine government should:
- Continue to implement the CADC. The Philippines should do so by acquiring new asymmetric capabilities like the BrahMos anti-ship missiles, building new port infrastructure, and increasing interoperability between the services of the Philippine armed forces. This should include maintaining the Philippine Army’s buy-in to the Philippines’ new outward-focused defense strategy by giving it operational control of key systems, including new anti-ship missile systems.
- Increase defense spending. If the Philippine government wants to make its CADC successful, modernize the Philippine armed forces, and acquire key assets, it will need to increase defense spending significantly, aiming at 2 percent of GDP, like other U.S. allies. This spending should be focused on achieving the goals of the CADC, with most new money spent on the procurement of anti-air and anti-ship capabilities.
- Resolve disputes with other South China Sea nations to present a united front to China. The Philippine government is already doing a good job of this and should continue to work with countries like Vietnam to present a united front against Chinese pressure campaigns.
Conclusion
The Philippines is a U.S. ally that occupies a position of strategic importance in the Western Pacific, both for the United States and its neighbors. The government in Manila recently has become aware of the threat posed by China, not only to its own security, but to the security of the broader Western Pacific. It is taking the initial steps to defend itself from Chinese aggression—and those same capabilities could prove capable of deterring broader, regional aggression from China. Given these developments, the United States should work with the Philippines to ensure that it can be an important and valuable member of a coalition of like-minded states that oppose China’s hegemonic ambitions.
Wilson Beaver is Policy Advisor for Defense Budgeting in the Douglas and Sarah Allison Center for National Security at The Heritage Foundation. Robert Peters is Research Fellow for Nuclear Deterrence and Missile Defense in the Allison Center.
