Philippines takes new aim at China
By Richard Javad Heydarian
MANILA - After a year of failed multilateralism and bilateral brinkmanship, the Philippines has abandoned hope of pressing China into a compromise on territorial disputes in the South China Sea. While Manila's recent decision to submit its case for United Nations mediation ups the diplomatic ante, Beijing's out-of-hand rejection of the move indicates tensions could rise before they wane. 
After a year of diplomatic deadlock at the Association of Southeast Asian Nations (ASEAN) under the chairmanship of Cambodia, one of China's staunchest regional allies, few expect a swift and decisive multilateral resolution under Brunei's more neutral leadership in 2013 considering the significant divisions that have opened inside the 10-member grouping.
Based on the proceedings and outcomes of regional summits and
gatherings held last year, Manila has come to realize the extent to which China is willing to use its multiple levers of influence to thwart any efforts at forging a unified regional response to the maritime disputes. Beijing has consistently insisted that the disputes should be settled exclusively through bilateral mechanisms.
At the same time, the economic stakes driving the disputes are rising. The US Energy Information Administration's (EIA) recently estimated that the South China Sea could hold as much as 11 billion barrels of oil and 190 trillion cubic feet of natural gas in proven and probable reserves. The EIA also projected significant undiscovered hydrocarbon deposits in the Spratly islands, specifically around the contested Reed Bank. 
If true, huge untapped oil and gas deposits within the Philippines' Exclusive Economic Zone (EEZ) would represent an economic boon. The Philippine economy is currently only 60% energy self-sufficient, with the 40% shortfall covered by oil and coal imports from neighboring and Middle Eastern countries. 
Yet China's rising assertiveness and increasing willingness to challenge Japan and the United States - both Philippine strategic allies - indicates to some analysts that China has designs on securing that potential energy bonanza for its own economic and energy security. Chinese and Philippine vessels skirmished around Reed Bank in March 2011, signaling Beijing's willingness to use limited coercion in disputes where energy resources are at stake.
China's showdown with Japan over the Senkaku/Diaoyu islands in the East China Sea and its People's Liberation Army's (PLA) alleged role in recent cyber attacks against US targets  has by association stirred anxieties in the Philippines. Manila maintains strategic partnerships with both Tokyo and Washington, ties that President Benigno Aquino is bidding to deepen to close its yawning defense gap with China.
Aquino's government has recently prodded the two powers to provide an extensive package of military aid, training and advanced hardware. The Philippines has effectively joined in a budding regional arms race through its pursuit, both through direct purchase and foreign military aid, of fighter jets, anti-ship missiles, patrol boats and naval helicopters to bolster its South China Sea claims.
Still, the Philippines has no intention of going head-to-head with its giant neighbor any time soon. Instead, Manila's has adopted a two-pronged strategy that aims to deter further Chinese aggression by internationalizing the disputes through the United Nations while strengthening its defensive capabilities through deepened ties with powerful allies.
While the Philippines has not been prone to the nationalistic outbursts seen in some neighboring countries, including China, Japan and Vietnam, Aquino's administration increasingly views its territorial disputes through a lens of national pride, geostrategic interest and domestic calculation. After decades of negligence and strategic hibernation, Manila has awoken to the depth of its national interests in the South China Sea.
This recognition comes amid a discernable national mood swing. The Philippines is now among the world's 10 fastest growing economies, with gross domestic product expected to grow by over 6% this year. Decades of political paralysis and endemic corruption have simultaneously galvanized civil society and youth groups, with many energized by Aquino's promise of political change.
Faced with those fast rising popular expectations, Aquino's government has astutely tapped into this grass roots dynamic. At the same time, a rising sense of national pride has put an even higher political and economic premium on securing the potential wealth of energy resources in the contested territories the Philippines claims in the South China Sea.
According to the most recent EIA report:
"The majority of current reserves exist in shallow water basins on the boundaries of the sea … however, the Spratly Island territory may contain significant deposits of undiscovered hydrocarbons…The US Geological Survey estimates anywhere between 0.8 and 5.4 (mean 2.5) billion barrels of oil and between 7.6 and 55.1 (mean 25.5) trillion cubic feet of natural gas in undiscovered resources. Evidence suggests that most of these resources are likely located in the contested Reed Bank at the northeast end of the Spratlys, which is claimed by China, Taiwan and Vietnam." 
The Philippines has sought to explore and develop hydrocarbon resources around the Reed Bank since first discovering natural gas there in 1976. The US-based Sterling Energy and UK-based Forum Energy won exploration concessions for the area from Manila in 2002 and 2005 respectively.  However, the Gloria Macapagal-Arroyo administration bowed to Chinese pressure and suspended exploration concessions granted to foreign interests in the area. She opted instead for joint exploration with Beijing and Hanoi under the 2006 Joint Marine Seismic Undertaking (JMSU) in the disputed area.
By standing up to China in defense of sovereign claims, the Aquino government aims not only to boost its domestic popularity but also avoid criticism from millions of politically active and increasingly nationalistic netizens. His government's policy stands in stark contrast with the Arroyo administration, which was widely viewed as subservient to China and tainted by corruption-ridden bilateral business deals.
Carrots and sticks
The Aquino administration has implemented a sometimes contradictory strategy by encouraging both a revitalized US military presence in the region while also attempting to appease China through diplomatic overtures. The strategy has been predicated on the assumption that a delicate combination of deterrence and diplomacy will neutralize Beijing's expansive territorial claims.
However, Manila may have failed to fully appreciate the significance of China's rising tide of popular nationalism, territorial assertiveness, and aggressive naval expansionism. Contrary to Philippine expectations, neither rising economic interdependence between China and Southeast Asia nor China's leadership transition from Hu Jintao to Xi Jinping has calmed Beijing's territorial assertiveness.
Manila also failed to anticipate China's anxiety about growing military cooperation between the US and regional allies and strategic partners such as the Philippines. That cooperation and occasional tough talk from Washington on freedom of navigation issues in the South China Sea has indirectly emboldened the Philippines and Vietnam to push their claims vis-a-vis China.
Just days after former US secretary of state Hillary Clinton expressed her country's opposition to any "unilateral actions that would seek to undermine Japanese administration" of the Senkaku/Diaoyu islands, the Philippines took its South China Sea claims against China to UN arbitration. In the previous month, Vietnam's new Law of the Sea took effect, which, among other things, emphasized the primacy of international law in deciding territorial disputes.
The Philippines is well aware that China will refuse to submit its claim of "indisputable sovereignty" to any international arbitration panel. Indeed, there is no guarantee that international arbitration under the United Nations Convention on the Law of the Sea (UNCLOS) will result in a decisive resolution of the disputes.
In this sense, the Philippine decision to internationalize the dispute should be viewed as a move to exert further pressure on Beijing by emphasizing to the international community the perceived unilateral and provocative character of China's territorial claims. That includes China's controversial "nine-dash line" map, which covers practically all features in the disputed waters.
In addition to a number of European parliamentarians,  top US officials such as the newly-installed Secretary of State John Kerry  have already expressed their support for the Philippines' decision to resolve the disputes through international law.
The other stick in Manila's new strategy is a military build-up. In 2012, Aquino sought an additional US$1.8 billion in defense spending, primarily to refurbish the country's armed forces through the acquisition of ten attack helicopters, two naval helicopters, two light aircraft, one frigate and air force protection equipment.  His government also extended the 1995 Armed Forces of the Philippines Modernization Act, which promises 15 additional years of sustained investment in the country's defense capabilities. 
In that direction, the Philippines is set to acquire 12 FA-50 fighter jets from Korea , three AW109 Power light twin helicopters , two anti-submarine choppers,  the US's high endurance cutter USCGC Dallas , and possibly Harpoon anti-ship missile systems for its flagship BRP Del Pilar and BRP Alcaraz vessels. 
Japan and the US have also backed the Philippines' bid to develop a "minimum deterrence" capability vis-a-vis China. Japanese Prime Minister Shinzo Abe is now finalizing his country's first major military aid package in recent history, with the Philippines set to be its biggest beneficiary. The Philippine Coast Guard is set to acquire from Japan next year 10 new 40-meter multi-role response vessels through a soft loan grant. 
In addition to tripling its military aid to the Philippines in 2012, the US has stepped up its military presence in the country through more rotational visits of its warships, nuclear submarines and military personnel - a trend that is expected to rise in the coming years in light of the US's announced "pivot" towards Asia. 
As Brunei assumes the chairmanship of ASEAN, the Philippines' strategy is to use new sticks to convince China to take the carrot of a multilateral dispute-settlement mechanism, specifically the adoption of a legally-binding code of conduct for the South China Sea.
Judging by China's defiant reaction to the Philippines' petition for UN arbitration in their disputes, there is a risk instead that Beijing views Manila's new two-way strategy as more stick than carrot and responds with reciprocal hard measures.
Richard Javad Heydarian is a foreign affairs analyst focusing on Iran and international security. He is the author of the upcoming book The Economics of the Arab Spring: How Globalization Failed the Arab World, Zed Books, 2013. He can be reached at email@example.com.
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