China/The Philippines: Deteriorating Sino-Philippine Relations Underscore Escalating Threats in the South China Sea
- Paul Ainscough
- Sep 4
- 7 min read
Key Takeaways:
Although China’s increasing assertiveness in the South China Sea is pushing some countries into submission, in the case of the Philippines, it is having the opposite effect. This introduces the risk of further escalation and a potential conflict.
Despite there being a significant mismatch between the two countries concerning military capabilities, US defence promises outlined in the 1951 Mutual Defence Treaty, coupled with the presence of US troops across the archipelago, complicate matters for Beijing.
While there is bipartisan recognition of the threat posed by China in the US, policymakers in Beijing are likely to attempt to push the boundaries and test the extent of US resolve in the South China Sea.
Introduction - The Philippines as a bastion of resistance
Contemplating a future conflict involving China tends to evoke scenarios such as an invasion of Taiwan, a border escalation with India, or even a confrontation with the United States. However, with Beijing’s increasing assertiveness on the international stage reshaping power dynamics, the number of potential flashpoints is growing. This is particularly the case in the Indo-Pacific, where countries are bearing the brunt of China’s rise and recalibrating foreign policies in response. Although many Indo-Pacific nations have opted to accommodate China out of fear that failing to do so will draw retaliation from Beijing, the Philippines stands out as a country taking an especially combative approach.
Despite having previously leaned towards appeasing China under President Duterte, the Philippines has shifted course under President Marcos Jr, who assumed the presidency in June 2022. Manila has since bolstered security ties with the US, pursued legal action over the South China Sea, and actively challenged Chinese provocations. With China’s overwhelming economic, military, and technological superiority and Beijing's intent on making an example that deters others from following a similar line, Manila’s struggle is as perilous as it is admirable.
The South China Sea as a Key Flashpoint
The China-Philippine confrontation largely boils down to one very important flashpoint: the South China Sea. Roughly 3.5 million square kilometres in size, the South China Sea contains over 250 islands, atolls, and reefs. A range of reasons contribute to these waters being of immense strategic importance. For China, establishing a dominant position is imperative to achieving the objective of puncturing the First Island Chain, a strategic noose encircling the country composed of wary nations. Its existence threatens China’s maritime access, particularly in the event of a war. Considering the country’s export-led economic structure, loosening the rope is imperative.
From the Philippines’ perspective, the waters are not even known as the South China Sea and are instead regarded as the West Philippine Sea. President Marcos Jr outlined the importance of resisting Chinese pressure at the May 2024 Shangri-La Dialogue, when he proclaimed that: “The life-giving waters of the West Philippine Sea flow in the blood of every Filipino. We cannot allow anyone to detach it from the totality of the maritime domain that renders our nation whole”. Unfortunately for Manila, Beijing is actively undermining the Philippines’ presence in the South China Sea.
China lays claim to 90% of the sea through the nine-dash line, arguing that Chinese explorers were the first to venture into the waters. However, research by the Council on Geostrategy has highlighted how this demarcation is actually “the product of misunderstandings and mistranslations by officials and private individuals in China during the 1930s”. Malaysia, Brunei, Indonesia, Vietnam, Taiwan, and the Philippines all contest China’s claims. With territorial tensions simmering for decades, the dispute has been a slow-burning source of friction with occasional flare-ups. There is little indication that an agreement will be reached anytime soon. In fact, with China’s economic rise fuelling an expansion in military investment and power projection capabilities, the country’s increasing aggression risks escalating the situation. This is evident through the utilisation of grey zone warfare to push other claimants to the precipice while avoiding triggering open conflict. A single misstep could ignite a wider conflict.
While there are many territorial disputes in these waters, a handful stand out between China and the Philippines. One is the Spratly Islands. Claimed in whole or part by China, Taiwan, Vietnam, the Philippines, Malaysia, and Brunei, the archipelago is spread over a vast area in the central South China Sea. Although the naturally occurring land area is less than five square kilometres, with the Spratlys sitting among some of the world’s busiest shipping lanes, rich fishing grounds, and vast energy reserves, there’s a lot at stake.
China, Vietnam, the Philippines, Malaysia, and Taiwan each occupy some features within the Spratlys. While China has seven outposts, Vietnam has 21, the Philippines occupies nine, Malaysia possesses five, and Taiwan maintains a single island. One recent dispute occurred in the Spratlys in April 2025 when a Chinese state-run newspaper published photos showing military personnel posing with a national flag on Sandy Cay. The reef was subsequently visited by the Philippines coast guard a few days later for an equivalent photo.
Another point of interest in the Spratlys is found at Second Thomas Shoal, located 195 kilometres west of Palawan in the Philippines. This is because in 1999, the Philippines deliberately ran aground a World War II-era ship called the BRP Sierra Madre at the location. The ship now acts as an outpost, with a small garrison of Philippine marines stationed aboard ever since. Unsurprisingly, China was not impressed by Manila’s ingenuity. Most famously, in 2014, China maintained a three-week-long blockade of the Sierra Madre, forcing the Philippines to airdrop supplies to those stationed aboard. Although Manila’s successful response resulted in Beijing ending the blockade, recent years have seen China amassing increasing numbers to harass resupply missions. Tactics such as ramming, loud sirens, blinding lights, and water cannons are regularly employed to assail Philippine vessels entering the area. As the situation escalates and the Sierra Madre continues to rust away, the longevity of the outpost remains uncertain.
Some 220 kilometres west of the Philippines' main island, Luzon, Scarborough Shoal marks yet another hotspot. Beijing seized the atoll from the Philippines in 2012 after a weeks-long standoff with the Philippines' navy eventually ended with the latter pulling back. Since then, China has maintained a constant and expanding patrol presence, enforcing a 22-kilometre exclusion zone through the same aggressive methods employed elsewhere. As a result, China’s coast guard and fishing vessels now dominate the area, preventing Philippine ships from entering the lagoon.
The build-up of Chinese ships to achieve objectives in the South China Sea is one aspect of what is referred to as the “cabbage strategy”. As noted by The Atlantic: “A Chinese presence and de facto Chinese rights in disputed areas are built up gradually, in a series of provocations that are individually small enough to make forceful resistance politically difficult, but that collectively establish precedents and, over time, norms”. One particularly striking dimension of this strategy has been the dredging of sediment to create and expand artificial reefs, effectively transforming them into military bases and strategic ports. This has been employed in the Spratly Islands and the Paracel Islands to the northwest. In addition to demonstrating how China is mobilising its superior resources to maximum effect, these projects enable Beijing to consolidate its territorial claims, expand power-projection capabilities, and tighten control over fishing grounds and energy resources.
How Far Does This Go?
Out of the many disputes in the South China Sea, those between China and the Philippines are particularly pronounced. Every week, the Philippines sends reconnaissance flights near Scarborough Shoal to challenge China’s exclusion zones. There have been incidents where Chinese helicopters have deliberately flown within metres of Philippine planes, putting lives on both sides at risk. In a separate alarming incident on 11 August 2025, dramatic footage was released showing a Chinese warship colliding with a Chinese coastguard vessel while chasing a Philippine patrol boat near Scarborough Shoal. Although the stricken Chinese vessel remained afloat, its entire bow was crumpled inward by the crash. At least three China Coast Guard personnel were on the bow at the time. While there has been no confirmation of any casualties, there is no guarantee that Beijing would be forthcoming with such information if there were.
While there have been no fatalities so far, President Ferdinand Marcos Jr has warned that any Filipino deaths resulting from China's actions would be considered an "act of war". These words could be designed to deter China from the most violent of its impulses rather than constituting an actual threat. After all, a Sino-Philippine war is unlikely to end well for the latter. While China’s 2024 military budget stood at $314 billion, the Philippines’ was $6.1 billion. There is a similar disparity concerning military personnel, as China boasts the world’s largest military force with approximately 2.04 million troops, compared to 143,000 for the Philippines. The imbalance is also mirrored in their respective arsenals. China possesses three aircraft carriers, 5,000 main battle tanks, and 1,025 military ships, whereas the Philippines has zero, ten, and 134.
Considering the mismatch, Manila has turned to Washington for a security umbrella. Chief among the defence agreements between the pair is the 1951 Mutual Defence Treaty, which obligates both nations to support each other if either is attacked by an external party. The US currently has access to nine Philippine bases on a rotational basis: six Air Force bases, two Army bases, and one Navy base located in northern Luzon. The presence of US forces, coupled with Washington’s pledges, is a strategic nuisance for China. In March 2025, US Defence Secretary Pete Hesgeth promised to work with allies to ramp up deterrence against the threat from China in the South China Sea. However, concerns have been raised among Philippine politicians about whether the US would honour the terms of the agreement. It is well-known that under the current Trump administration, the US is undergoing a period of limited interventionism. While there is bipartisan recognition of the threat posed by China, policymakers in Beijing are likely to attempt to push the boundaries and test the extent of US resolve in the South China Sea.
Business Implications - The need for robust contingency planning
The strategic geopolitical situation in the Indo-Pacific is complex and crucial to the world order. The situation in the South China Sea and between China and the Philippines sits high among the list of challenges that could pose severe global economic consequences if not managed carefully. The implications of a China-Philippine conflict would extend far beyond the two countries alone, underscoring the importance of companies operating across the region to develop contingency plans and assess associated threats. With the South China Sea acting as a crucial conduit for much of the world’s maritime trade, the economic consequences of war would be international in scale. Nevertheless, companies operating in the Indo-Pacific would be most at risk. Considering the wide array of possible outcomes that could manifest should the situation escalate, Global Situational Awareness’s scenario planning is a pertinent consideration for business leaders seeking to mitigate the risks posed by the situation.
