Feuding Dynasties and Clashing Empires: The Philippines’ Middle Power Moment

The Philippines has long occupied a strategically vital position in its region, first as Spain’s Asian outpost for more than three centuries and then, fatefully, as America’s “gateway to the East” in the early twentieth century. Under the Stars and Stripes, a tutelary government fostered the adoption of the English language and American-inspired political institutions on the islands. Filipinos and Americans had the shared experience of resisting Japanese aggression in World War II; after its formal independence in 1946, the country continued to play a pivotal role in America’s overseas power projection capabilities, hosting key U.S. military installations at Clark Air Base and Subic Bay throughout the Cold War. It was also a close partner to Washington in the early twenty-first century, amid the heyday of the American-led global War on Terror. And as a legacy of this long and complex relationship with its former colonial hegemon, it is the only state in the region with a Mutual Defense Treaty (MDT) with the United States.

But what makes the Philippines truly consequential nowadays is how it lies at the confluence of two major conflict areas in the Indo-Pacific. The archipelagic nation now stands at the frontlines due to its criticality in any plan to resist a Chinese invasion of Taiwan and its active involvement in South China Sea disputes. Philippine maritime forces and ordinary fishermen have been resisting Chinese “grayzone” intimidation tactics almost daily. As a result, the Philippines has become a pivotal element of America’s “integrated deterrence” strategy, which aims to mobilize a robust network of regional allies and partners to check China’s worst instincts and revanchist ambitions.¹

Against the backdrop of Sino-American tensions, the Philippines is also confronting a brewing civil war between the country’s two most powerful political dynasties. Since the return of the Marcoses to the Malacañang Palace in May 2022, they have wasted no time in rehabilitating their political image both at home and abroad; in building new political coalitions, including with more liberal and progressive elements; and in revitalizing frayed ties with Western partners, most notably the United States.² But Ferdinand Marcos Jr.’s attempt at projecting a more “reformist” image—and his decision to reverse some of the most authoritarian policies of his immediate predecessor, Rodrigo Duterte—have set him on a collision course with the Dutertes. After all, the Duterte dynasty had expected a significant element of policy continuity as well as outsized influence in its “UniTeam” coalition composed of President Marcos and Vice President Sara Duterte. What has particularly enraged the former president’s family, however, is Marcos’s decision to double down on defense cooperation with the West and, crucially, adopt a more assertive and critical stance towards China, the de facto patron of the Dutertes.

Thus, the Philippines is confronting what might be called a “double Cold War,” one between Beijing and Washington and another between the Marcoses and Dutertes. It amounts to an unprecedented political conflict, one that’s expected to dominate the upcoming midterm elections in May 2025, which will serve as a referendum on the incumbent. This showdown has clear geopolitical dimensions that will be of great interest to the Trump administration as it develops its regional strategy.

China has stepped up its local influence operations, raising the stakes for the major powers. But as the saying goes, serious crises should not go to waste. This intersection of geopolitical and domestic crises can, at the same time, serve as a springboard for accelerating the Philippines’ emergence as a full-fledged “middle power.” And this should be a welcome development for Washington and likeminded allies, who, as this essay will show, would have an interest in helping to boost the Philippines’ political resilience, economic momentum, and military modernization. As well as aiding the internal development of the Philippines, it would strengthen the “rules-based order” in the Indo-Pacific that Washington has pledged to uphold. The Southeast Asian nation could also become a central player in any U.S.-directed Indo-Pacific “de-risking” strategy by serving as a key component of a “Taiwan Plus One” semiconductor production scenario as well as a prime supplier of critical minerals such as nickel. The Philippines, therefore, is in a prime position to transform into a bulwark against an aggressive China as well as a key supplier of critical minerals, semiconductors, and other strategically vital goods.

A Game of Thrones

In July 2024, Vice President Sara Duterte tended her resignation from Marcos Jr.’s cabinet. Hitherto, she had overseen the most well-funded agency in the government, the Department of Education (DOE). Under the Philippine Constitution, the country’s defense budget can’t surpass the education budget, thus the DOE, overseeing the operations of close to a million public school teachers, is even better funded than the Armed Forces of the Philippines (AFP). Even more interestingly, she had enjoyed access to special discretionary “confidential funds” (CF), with little legislative oversight. Given the expansive mandate of the DOE, she justified her access to CFs by claiming that she had to also combat infiltration by communist rebels into educational institutions across the country. At one point, her office had enjoyed larger CFs than the country’s main intelligence and national security agencies.³

In her resignation speech, Sara Duterte sought to portray herself as the victim of persecution by Marcos’s allies, who suddenly began scrutinizing her questionable use of CFs as education secretary. It didn’t take long before Sara Duterte made ominous statements, notably announcing that she would skip the annual State of the Nation Address (SONA) by the president and, instead, appoint herself as the “designated successor.” Cognizant of the namesake Netflix series, in which a lowly cabinet member takes over the U.S. presidency after a cataclysmic attack on the State of the Union, authorities expanded security measures ahead of Marcos Jr.’s third SONA in the Philippine Congress. It certainty didn’t help that, months earlier, the Philippines’ top general had warned of “coup plots” by elements sympathetic to the Dutertes.⁴

Over the coming weeks, Sara Duterte stepped up her attacks on the Marcos administration by effectively calling on the incumbent to relinquish office (in her favor) while presenting herself, in the meantime, as the de facto leader of a new opposition. Not long after, she publicly accused Marcos allies, including the Speaker of the House and the president’s cousin, Martin Romualdez, of orchestrating her impeachment from the office of the vice presidency, which she had tightly clung onto despite resigning from the cabinet. “Losing the vice presidency is not a big deal to me. . . . They are talking about [impeaching me]. Even if they deny it, the members of the House [of Representatives] are talking about it,” she declared following contentious exchanges with members of the Philippine Congress during budget hearings. In a series of defiant speeches and interviews, she made it clear that her family was now facing nothing less than an existential threat. Her supporters then began to accuse the Marcoses of political treachery and serving as “America’s lackey” by needlessly provoking tensions with China.⁵

The episode marked an unprecedented reversal of fortunes for the once mighty Duterte family. But it also presented a major challenge to Marcos, who now had to contend with the resulting collapse of his approval ratings in the southern island of Mindanao, the bailiwick of the Dutertes. Both sides, however, have suffered declining approval ratings amid their intensifying feuds. In a survey conducted in the third quarter of 2024, Marcos had the support of only 26 percent of Filipinos in Mindanao, while Sara Duterte had only a 36 percent approval rating in Manila and the National Capital Region, where the bulk of the Philippines’ economic output and political influence are concentrated.⁶ The infighting evidently damaged both sides, which together had enjoyed supermajority support following their emphatic victory in the 2022 elections. But what does it all mean, for Filipinos and foreign observers? To fully understand the domestic and geopolitical implications of this dynastic conflict, it would be useful to briefly revisit the presidential career of Sara’s father, Rodrigo, whose maverick policies may foreshadow the direction of the Philippines’ political and strategic orientation should the Dutertes prevail over the Marcoses.

In the 2016 Philippine presidential election, the populist Rodrigo Duterte seized control of an already divided and polarized political landscape. He did so by adopting the most outrageous policy positions, including the threat to shut down the Philippine legislature and summarily shoot down criminals, which won over less than 40 percent of the voters yet enough to win by plurality. Had his main rivals united under a single appealing candidate, they would likely have prevented Duterte’s takeover of the Philippine state. Over the next six years, Duterte, a longtime provincial mayor with no relevant experience in national politics, upended the country’s domestic political landscape as well as foreign policy orientation. At home, he oversaw a bloody “drug war,” which claimed the lives of tens of thousands of suspected drug dealers. He also launched lawfare campaigns against key opposition figures, culminating in the imprisonment of senator and former human rights commissioner Leila De Lima; unseating of Supreme Court Chief Justice Maria Lourdes Sereno; and partial exile of renowned journalist Maria Ressa. Meanwhile, Vice President Leonor Robredo, who hailed from the opposition Liberal Party, repeatedly faced the threat of impeachment.

Eventually, Duterte orchestrated the shutdown of the country’s largest independent media outlet, ABS-CBN, in tandem with legislative allies. Increasingly, heavy-handed policies at home coincided with a foreign policy lurch toward the authoritarian superpowers of China and Russia, which wholeheartedly backed Duterte and his illiberal agenda in the Philippines. In exchange, a grateful Duterte sought closer defense and strategic ties with both Beijing and Moscow, while repeatedly threatening to sever defense ties with traditional partners, especially Manila’s ties to Washington. Amid bilateral disagreements over his human rights record, Duterte went so far as temporarily abrogating the Philippine-U.S. Visiting Forces Agreement, which has long served as the legal anchor for large-scale annual joint exercises and close military cooperation between the Armed Forces of the Philippines and the Pentagon.⁷

Duterte upended the Philippine political landscape with astonishing alacrity. The bulk of the Philippine elite appeared ready to acquiesce to his wishes, while the few remaining bastions of independence were marginalized through a cocktail of legal harassment and death threats. He also exploited the Covid-19 pandemic to impose draconian restrictions, weaponize libel laws against his critics in the name of public health safety, and appropriate huge chunks of the national budget with limited oversight by an emasculated and pliant Congress.⁸

Nevertheless, Duterte failed to fulfil his ultimate objective: namely, changing the Philippine constitution in ways that would entrench his power. The biggest obstacle to his agenda was the Philippine defense establishment, which historically has been close to the West. On multiple occasions, both the AFP as well as Duterte’s own defense and national security appointees refused to participate in his controversial “drug war,” implement any major defense deal with China, or institute nationwide martial law or a military junta.⁹ The Philippine defense establishment had correctly calculated that Duterte was too fearful to confront the country’s armed forces, who had helped oust two former presidents, Ferdinand Marcos Sr. in 1986 and Joseph Estrada in 2001. None other than Duterte himself repeatedly admitted that he feared alienating the military since they would likely topple him for crossing their redlines. He also publicly admitted that the Philippine military was “pro-American,” hence their institutional resistance to any major disruption in bilateral military ties in favor of China or Russia.¹⁰

By 2021, Duterte found himself in a quandary. Constitutionally confined to a single, six-year term in office, he scrambled for ways to perpetuate himself in power. Inspired by his “favorite hero,” Russian president Vladimir Putin, Duterte sought to engineer a self-serving succession plan, which would both circumvent the constitution while maintaining his grip on power. Just as Putin decided to temporarily serve as a prime minister to his protégé, Dmitry Medvedev, to circumvent constitutional restrictions, Duterte hoped to become the “power behind the throne” by pushing his longtime assistant, Christopher Go, to run as the president in the 2022 elections. But two problems immediately emerged, namely Go’s hopelessly low polling numbers in pre-election presidential surveys and the emergence of Duterte’s daughter, Sara, as an early favorite in the race. But the then outgoing president prevaricated, insisting on Go’s succession while trying to convince his daughter to consider either teaming up with his longtime assistant or a separate run as a vice-presidential candidate.

Sensing a historic opening, the Marcoses made a bold bid for the Malacañang Palace by successfully negotiating a supposed power-sharing deal, whereby Marcos, who had narrowly lost the 2016 vice-presidential race, would run for the top office in tandem with Sara Duterte, who would govern as something like a copresident. Sara, now reeling from a lack of support from her father, found the prospect of a formidable alliance with the Marcoses too enticing to ignore. She treated her vice-presidential bid as a steppingstone to the highest office in the next election cycle. Or, at least, that’s what the Marcoses managed to convince her into believing. But her father, the outgoing president, remained deeply skeptical, since he viewed the Marcoses as opportunistic allies who would ultimately outsmart his daughter. He went so far as to call Marcos a “brat” and a prodigal son of the late Philippine dictator. At one point, the outgoing president implied that his potential successor was a drug addict, a particularly ominous insinuation given the suspicious and violent massacre of thousands of suspected drug users across the country under Duterte’s administration.¹¹

Anatomy of a Political Divorce

The proposed Marcos-Duterte ticket seemed like a big gamble, but it eventually paid off. Sara’s decision to defy her skeptical father would turn out to be a stroke of political genius. Or so it initially appeared. The UniTeam secured the largest share of votes in contemporary Philippine elections. Marcos Jr. became the first president elected by a majority since his father’s election more than half a century earlier. While the Marcoses brought the “Solid North” base of northern Luzon provinces to the table, the Dutertes added the “Solid South” of Mindanao-based and Visayan-speaking voters to the ticket’s electoral calculus. Meanwhile, the liberal-progressive opposition was effectively decimated. Former vice president Robredo secured a respectable fifteen million votes, but that was barely half of the thirty-one million votes for the UniTeam candidates. Only a single member of the opposition, Senator Risa Hontiveros, managed to win a national post. Suddenly, the Marcos-Duterte axis seemed like an unstoppable force, one destined to rule in perpetuity. Upon closer examination, however, the tactical alliance was bound for an ugly divorce, thanks to a complete lack of ideological coherence and the centrality of self-interest to each side’s calculations.¹²

Paradoxically, the weakness of the opposition helped accelerate the disintegration of the inherently fragile UniTeam. After all, the major factor behind their electoral coalition was to forestall the potential return of an energized liberal opposition, especially as Robredo managed to inspire million-strong rallies and a broader “Pink Movement” across the country. Both the Marcoses and Dutertes were worried about facing accountability should Robredo take over the Malacañang Palace. Both ahead of the 2016 elections, where she narrowly defeated Marcos Jr. for the number two spot, and the 2022 elections, where she made an eleventh hour decision to run for office, Robredo made it clear that her raison d’être was to forestall the impending return of the Marcoses to power. A Robredo administration, therefore, could mean the prosecution of both Marcoses and Dutertes. In fact, the Marcoses face decades-old court cases in the United States for their corruption and human rights violations during the dictatorship era, while President Rodrigo Duterte had faced the prospect of prosecution by the International Criminal Court (ICC) for crimes against humanity. The formation of the UniTeam, therefore, was also about shielding the two notorious dynasties from the prospect of facing justice for their alleged crimes in office.¹³

Bizarrely, Robredo and the broader opposition movement demobilized as soon as elections were over. With much of the nation rallying behind the new administration, Marcos wasted no time in consolidating power. In his first major act as president, he walked back an earlier promise to appoint Sara Duterte as his defense minister. The move proved extremely controversial, prompting Duterte supporters to publicly criticize the president for seemingly betraying a major campaign promise. But more disappointments were in store for the Dutertes, as Marcos eschewed the UniTeam’s supposed policy priorities once in office. In particular, Marcos failed to act on a pledge to shift the Philippines from its Manila-centric unitary government into a federal system, a longstanding demand of the Mindanao-based politicians, nor did he accept the need to continue his predecessor’s drug war.¹⁴ But what ultimately undercut the UniTeam’s viability was Marcos’s foreign policy recalibration in favor of the country’s traditional Western allies.

Throughout his six years in office, Duterte refused to visit a single Western capital. Invariably, he insulted American officials, including President Barack Obama, calling him a “son of a whore,” and dismissed Washington as a “lousy” destination.¹⁵ Meanwhile, he became the first Filipino president to visit Moscow on multiple occasions and China almost half a dozen times. In contrast, Marcos’s first major overseas visit was to the United States, where he met President Joe Biden on the sidelines of the United Nations General Assembly. The cordial meeting came not long after a top U.S. diplomat visited Manila to reassure the new Filipino president of “sovereign immunity” from pending U.S. court cases against the Marcoses.¹⁶

Despite the Marcoses’ odious reputation, the new Filipino president impressed his American counterparts by adopting a far more strident and uncompromising position on the South China Sea disputes. To Washington’s delight, Marcos affirmed the finality and binding nature of the 2016 arbitral tribunal award, under the aegis of the UN Convention on the Law of the Sea (unclos), which rejected China’s expansive claims across the contested areas. Marcos also signaled his unwillingness to yield even a single inch of Philippine territory in the disputed areas. In contrast, Duterte had earlier rejected the arbitral award as a worthless “piece of paper,” warned his countrymen against “suicidal” conflict with China, and repeatedly pushed for “resource sharing” in disputed waters in defiance of both unclos and the Philippines’ own constitution.¹⁷

Barely six months into office, Marcos not only met Biden, but also hosted top U.S. officials, including Secretary of State Antony Blinken as well as Vice President Kamala Harris. To underscore a new era of revitalized strategic relations, Harris personally visited the western island province of Palawan aboard a Philippine Coast Guard vessel in a strong message of solidarity with Manila amid China’s constant harassment of Philippine vessels and fishermen in the South China Sea. But Marcos managed to appease his pro-Beijing his allies at home by welcoming, at least rhetorically, a “new golden age” of bilateral relations with China. On multiple occasions early in his presidency, he indulged in diplomatic flattery, going so far as to praise China as the Philippines’ “most special friend” and a key partner for economic development. But Marcos’s early 2023 visit to China proved a singular disaster and set the stage for a major recalibration in Philippine foreign policy over the succeeding months. Failing to recognize the shifting sands in Philippine politics, China mistakenly assumed that it could impress the new Filipino president with empty pledges of investments as it did during the Duterte presidency.¹⁸

But the Marcoses were no Dutertes, who were relative neophytes in high-stakes geopolitics. From a very young age, Marcos, as the heir-apparent to his father, was exposed to global politics unlike any other Filipino leader. In fact, he had accompanied his mother, Imelda, to Beijing in the mid-1970s in order to help normalize bilateral relations between Manila and Maoist China. Despite promising $24 billion in investments during the Duterte presidency, China barely implemented a single big-ticket infrastructure project. Instead of a “debt trap,” the Philippines grappled with China’s “pledge trap,” in which Beijing offered seemingly lucrative but dubious investment pledges in exchange for immediate geopolitical concessions. Unlike Duterte, however, Marcos has never been beholden to China. There is no indication that Beijing and its proxies played any serious role in Marcos’s seamless rise to the presidency.

Marcos quickly emerged as a much more results-oriented president than his immediate predecessor: Duterte seemed only too happy to emphasize China’s empty promises while welcoming large numbers of Chinese online casino businesses, who bribed top Philippine officials en masse, even allegedly compromising the president’s inner circle. In contrast, the Marcos administration quickly swept out these corrupt actors and renegotiated multiple Chinese investment projects, which failed to take off during Duterte’s term. Accompanied by hundreds of businessmen, Marcos expected to finalize the status of major Chinese infrastructure projects and, crucially, secure meaningful concessions in the South China Sea. To his astonishment, however, China refused to offer anything concrete, hoping that the new Filipino president would, similar to Duterte, remain satisfied with the vaguest initiatives. Realizing that Beijing was not in a mood for any compromise or actual big-ticket investments, Marcos recalibrated his foreign policy.

Just weeks after visiting Beijing, the Filipino president openly complained about his country’s maritime disputes with China during a panel conversation at the World Economic Forum in Davos, Switzerland. Not long after, he shocked both China and the Dutertes by deciding to expand the parameters of the Enhanced Defense Cooperation Agreement (EDCA), namely granting the Pentagon access to four new military facilities in the northern provinces of the country. In the meantime, Marcos also publicly advocated for a trilateral Japan-Philippines-U.S. (japhus) security cooperation framework ahead of his trip to Tokyo. He also welcomed top defense officials from Canber­ra and expressed his openness to expanding defense cooperation with Australia. He greenlit a much-vaunted “transparency initiative” in the South China Sea, which empowered the PCG and Philippine Navy to document and publicize China’s aggressive maneuvers and intimidating tactics in the disputed waters.¹⁹

By mid-2023, the Dutertes were up in arms, with the former presi­dent openly accusing his successor of serving as America’s vassal, risking an apocalyptic nuclear war with China, and endangering the Philippines’ sovereignty by hosting an ever-larger American military presence in Philippine facilities. In a brazen act of effrontery, the former Philippine president unilaterally visited Beijing and met President Xi Jinping without any prior coordination with either the Philippine Department of Foreign Affairs or the Malacañang Palace. By then, it had become clear that Beijing was leaning on the Dutertes to openly defy the Marcos administration’s foreign policy. Despite several attempts by Marcos to downplay the incident (and going so far as deferentially hosting his predecessor at the Malacañang shortly after the Beijing trip), the rupture was by then complete.²⁰ It was now just a question of who would try to draw the first blood.

The answer came in January 2024, when the former president gave a fiery speech in his hometown of Davao and went so far as personally attacking his successor. “Bongbong Marcos was high back then. Now that he’s the president, he’s still high. . . . We have a drug addict for a president! That son of a whore!” declared Duterte, now directly questioning the fitness as well as the mandate of his successor. Worse, Duterte threatened a “People Power” revolution, akin to the one that toppled Marcos Sr. in 1986, and called on the Philippine military to challenge its commander-in-chief. Then, he effectively incited rebellion by calling on his home island of Mindanao to secede from the rest of the country,²¹ sparking condemnation from the country’s defense establishment, including former generals who served in his administration. “Secession is not the answer to Mindanao’s concerns. It would violate the fundamental tenets of our Constitution. It would destroy the territorial integrity of the Philippines, and disrupt decades of painstaking effort to build a stronger union among all our peoples and ethnicities,” warned National Security Adviser Eduardo Año, who served as the AFP chief and interior secretary under Duterte. “Any attempt to secede . . . will be met by the government with resolute force.”²²

Instead of recalibrating, however, the Dutertes doubled down on their attacks on Marcos, with Davao City Mayor and Rodrigo’s son Sebastian Duterte repeatedly calling for the president’s resignation. But the episode failed to achieve its intended results, partly due to the Dutertes’ shrinking support base and increasingly limited resources. The Philippine Congress, now led by Marcos loyalists, steadily clipped the fiscal wings of the Dutertes by, inter alia, removing both Sara Duterte’s confidential funds as well as pork barrel allocations to Davao City, represented by Congressman Paolo Duterte, another son of the former president. The more crucial factor, however, was Marcos’s knack for avoiding open conflict, a cautious temperament likely born out of the traumatic circumstances surrounding his father’s abrupt downfall. Realizing the perils of political adventurism, Marcos gradually clawed his way back to power after returning to the country from exile in the early 1990s, restoring his family’s political credibility along the way.²³

Throughout Duterte’s years in office, Marcos largely avoided any self‑aggrandizing moves. This was especially the case when Duterte refused to lean on a relatively pliant Supreme Court to assist Marcos’s direct electoral recount challenge to Vice President Leni Robredo. Nevertheless, Marcos kept his cool in the face of this apparent political snub and continued to court the Dutertes’ favor until he secured the decisive UniTeam alliance, which paved the way for the Marcoses return to the Malacañang Palace. If anything, he insisted on the supposed integrity and continuity of his alliance with the Dutertes for the first two years of his presidency by retaining Sara Duterte in his cabinet for so long.

But the floodgates were opened when Marcos’s feisty and outspoken wife, Liza Araneta Marcos, herself the scion of another storied dynasty, publicly chastised Sara Duterte. Referring to how Sara sat in the audience at her father’s rally and visibly laughed as he insulted Marcos, the first lady was indignant: “You’re supposed to be the alter ego [of the president]. We are there protecting [him] and then you’ll do that. That’s wrong. You crossed the line.”²⁴ Her intervention proved to be the clincher. Not long after, Sara Duterte resigned, paving the way for a clash between the Philippines’ two most powerful families.

The Pivot State

The festering domestic political upheaval in the Philippines holds significant geostrategic implications for the region. Manila has already become a sort of contemporary southeast Asian version of Cold War–era Berlin, that is, a theatre of espionage and intrigue amid great power rivalry. Thanks to intelligence support from Washington and Western allies, Philippine authorities have been able to track down Chinese operatives posing as journalists, businessmen, and even “Filipino citizens” in the country.²⁵

The most notorious case is Zhang “Steve” Song, Manila bureau chief for the Wenhui Daily and agent of China’s Ministry of State Security (MSS). Song steadily infiltrated Philippine political, business, and even media elite circles over the past three years under the guise of journalistic pursuits. He reportedly left the country immediately after getting exposed by Philippine authorities. Aside from tracking Chinese journalist-cum-spies, the Marcos administration has also pressed ahead with shutting down the notorious Chinese online casino operations, better known as Philippine Offshore Gaming Operators (POGOs), which have been a legal as well as national security nightmare for the country over the past six years. In his third State of the Nation Address, Marcos announced a blanket ban on the POGOs, because they have been “[d]is­guising as legitimate entities” but, in reality, are involved in “illicit areas furthest from gaming, such as financial scamming, money laundering, prostitution, human trafficking, kidnapping, brutal torture, [and] even murder.” Philippine authorities are deeply worried about China potentially embedding intelligence operatives among or recruiting from thousands of POGO workers. Not only are these online Chinese casino operations largely off-limits to outsiders, but they have also been suspiciously spread across strategically located compounds. POGOs tend to cluster around key military facilities, including the Philippine Air Force and Navy headquarters, Philippine National Police headquarters at Camp Crame, and Camp Aguinaldo, which hosts the Philippine Army and the National Defense Department offices.²⁶

The POGOs mushroomed largely during the Duterte presidency, which expected billions of dollars in potential revenues. But even the former president’s top security officials publicly raised alarm bells. “When you already see many people [at the POGOs], who are always there . . . it’s very easy for all these [Chinese] people to perhaps shift their activities to spying,” then Philippine National Defense Secretary Lorenzana said in a mixture of English and Tagalog. “They are near [military facilities].” On his part, then Philippine National Security Adviser Hermogenes Esperon warned, “You’d also start getting worried when a whole building, condominium, tower is occupied by only one nationality where you would not be able to guard all their activities. . . . You will see something like a rotation of every eight hours of people going in and out [of buildings in POGO areas] then you would begin to wonder what they are doing.”²⁷

Despite growing pressure, the Duterte administration continued to welcome the influx of more than one hundred thousand POGO workers. Most dramatically, a Chinese citizen involved in POGO operations managed to become a local government official. Alice Guo, whose real name is Guo Hua Ping, was elected as mayor of Bamban City, not far from major military facilities, including Clark Air Base, formerly America’s largest overseas airbase, and the Basa Air Base, which is undergoing major upgrades and currently hosts EDCA facilities. Guo’s true identity was exposed following a series of sensational hearings in the Philippine Senate, where the true depth of the Philippines’ infiltration by Chinese criminal groups and intelligence operatives was laid bare. Not only was her illegally obtained Philippine passport eventually canceled, but now Guo also faces multiple criminal charges, including for trafficking and other serious crimes. She temporarily escaped to neighboring Indonesia, but she was eventually apprehended by local authorities and extradited back to Manila. According to Chinese businessman She Zhijiang, who has confessed to serving as an agent of China’s Ministry of State Security (MSS) and is currently detained in Bangkok, Guo has also been serving as an intelligence asset for Beijing.²⁸

Other major causes for concern include China-backed disinformation campaigns, which favor proxies like the Dutertes while directly targeting key officials in the government. In fact, Marcos was himself a victim of deepfake operations, including A.I.-generated content that tried to portray the Filipino leader as a drug addict as well as a warmonger. “[A] network of coordinated inauthentic accounts across X and YouTube [found to be] amplifying the video [were] very likely linked to the Chinese government,” an assessment by the Australian Strategic Policy Institute concluded.²⁹

Confronting a multifront challenge from China, the Marcos administration has embraced, together with key allies, a de-risking strategy. Aside from tightening visa restrictions on Chinese nationals and instituting a ban on POGOs, the Philippines has also effectively pulled out of the Belt and Road Initiative (BRI) and, crucially, is assessing the Chinese footprint in its critical infrastructure. Especially concerning is the National Grid Corporation of the Philippines (NGCP), which is responsible for transmitting electricity in the economic and political center of the country yet run by Chinese engi­neers. The State Grid Corporation of China has a 40 percent stake in the NGCP and is allegedly responsible for the entire operational and technical knowhow undergirding this vital public utility. The Marcos administration is considering the need for a takeover of the NGCP to protect national security.³⁰ The Philippine government also regards Chinese telecommunication investments with suspicion and an eye toward rolling back the presence of Huawei and China Telecom. In the past, the United States warned that any ally’s reliance on Chinese 5G telecommunication technology could jeopardize intelligence sharing.³¹

The Philippines is not playing a defensive game alone, however. The Southeast Asian nation is actively positioning itself as a “pivot state,” which could determine the course of great power competition as well as the fate of a rules-based order in the Indo-Pacific. Geography is clearly a major factor. Practically all of the newly opened EDCA facilities, namely in the northern provinces of Cagayan and Isabela, have a clear strategic orientation towards the Taiwan theatre. The Pentagon has been in conversation with authorities in the northernmost province of Batanes for the construction of a port facility. The Philippines also has a newly refurbished naval outpost in the island of Mavulis, eighty eight miles from the southern tip of Taiwan.³²

Despite stiff opposition from China, the Philippines has also become pivotal to an emerging “game of missiles” in the region. In 2024, the Pentagon deployed, for the first time, the vaunted Typhon missile system to the Philippines ahead of the annual joint Exercise Balikatan between Philippine and American troops, based on simulated war games in adjacent waters with China in mind. Initially, Manila and Washington equivocated on the precise purpose of the deployment, suggesting that the missile system was deployed for purely logistical exercises. Over the succeeding months, however, Philippine authorities began to sing to a different tune. Philippine military chief Romeo Brawner recently quipped about hosting the weapons system “forever,” while another senior defense official bluntly told the media that it relished giving China “sleepless nights” over the issue. The medium-range capability Typhon is a newly developed missile system capable of launching missiles, such as SM-6 missiles and Tomahawks, over sixteen hundred kilometers (994 miles), thus placing much of southern China within its range. The expansion of EDCA with and Typhon deployment to the Philippines is consistent with the U.S. Distributed Maritime Operations (DMO) operating concept, since, as one defense analyst put it: “The U.S. can spread Typhon sensors and weapons across multiple EDCA sites, employ longer-range and unmanned systems and use resilient communication links to maintain coordination and adaptability in a contested environment.”³³

With China preparing for a possible invasion of Taiwan and placing its “carrier-killer” missile systems across its southern provinces, close to the Taiwan Straits, the EDCA bases and sophisticated missile systems stationed in the Philippines are crucial elements of both America’s deterrence strategy and planning for potential intervention in the event of conflict. The episode mirrors South Korea’s diplomatic tensions with China over hosting America’s Terminal High Altitude Area Defense (thaad) system, which affected the regional balance of military force in Beijing’s eyes. Like Seoul, Manila is holding its ground on the issue.

Over the next decade, the Philippine government is expected to spend $35 billion on acquiring new weapons systems, focusing on naval and aerial platforms. The amount may be sustainable since the Southeast Asian nation, already boasting a half-a-trillion gross domestic product, is already the fastest-growing economy in the region and expected to feature among the twenty largest economies in the coming decades.³⁴ Manila also aims to transition away from an age-old defense doctrine centered on domestic counterinsurgency and counterterrorism operations to one that is oriented toward external threats, particularly China.

Accordingly, the Philippines has adopted the Comprehensive Archipelagic Defense Concept (CADC). This strategic blueprint aims to enhance the country’s domain awareness and maritime defense capabilities across all its adjacent waters, particularly in the South China Sea and the Philippine Sea, which respectively fall into the so-called “First” and “Second Island Chains” of contestation between the superpowers. The U.S. remains a key partner, particularly with Washington offering a multi-billion-dollar defense package over the next few years, following the fourth iteration of “Two Plus Two” meeting between senior American and Philippine defense and foreign policy officials, held in Manila in 2024.³⁵ Hosting advanced American weapons systems remains a trump card for the Philippines, since it gives Manila tremendous leverage in its relations with Beijing. After all, the Marcos administration can credibly threaten to further expand the parameters of EDCA and host even more Typhon missile systems in the future should China seek to forcibly take over Philippine-claimed land features in the South China Sea, most notably the Second Thomas Shoal, which has been the site of increasingly aggressive grayzone actions by China in the past year. For example, Chinese Coast Guard vessels routinely harass Philippine sailors attempting to resupply the crew of a decrepit warship that the Philippine Navy ran aground on the Shoal in 1999 to assert its claim.³⁶

Even as the Philippines aligns more closely with the United States, its government seeks to avoid sole dependence on its treaty ally through partnerships with other U.S. allies. It has cultivated a diverse network of defense partnerships, including with Japan, Australia, South Korea, India, New Zealand, Poland, France, and Germany. In the past decade, South Korea has been a supplier of fighter jets and warships, while India has provided supersonic missile defense systems. Over the coming years, the Philippines seeks to acquire submarines, multirole fighter jets, drones, and frigates to beef up its defensive capabilities. For the Philippines, however, simply purchasing weapons systems from overseas won’t cut it. Accordingly, President Marcos recently signed into law the Self-Reliant Defense Posture Program (srdpp), with the goal of boosting the country’s domestic arms industry and enhance prospects for joint development of modern military systems with aligned powers. “This means developing systems and strategies that are reactive and predictive, allowing us to stay a step ahead of those who wish harm to the Philippines,” the Filipino leader said after signing the srdpp into law.

The Marcos administration has also adopted a more proactive de-risking strategy, which goes beyond purely defense-related matters. In fact, Manila is not interested in just becoming a military bulwark or a “new Pearl Harbor” for the West against an expansionist China. The Philippines also aims to attract high-quality investments from Western, Japanese, and South Korean partners in vital industries.

Boasting the fastest growth rate in Southeast Asia, the Philippines is expected to achieve a trillion-dollar GDP by 2030, with per capita income doubling in the third decade of the twenty-first century.³⁷ But the quality and sustainability of this growth are still works in progress. The Philippines has primarily a service-oriented economy, with a comparatively small manufacturing base relative to its regional peers as well as a declining agricultural sector.³⁸ Manufacturing, an engine of growth among East Asian nations, only accounted for 19 percent of GDP in 2022, employing only 7 percent of the country’s labor force.³⁹ In contrast, the services sector alone contributes close to 60 percent of GDP as well as employment-generation.⁴⁰ Meanwhile, remittances from millions of overseas Filipino workers account for close to 10 percent of Philippine GDP in recent decades, one of the highest proportions in the world. The Philippines has also lagged its neighbors in terms of gross fixed capital formation and infrastructure investments. Buoyed by rapid growth rates in the past decade, however, the southeast Asian nation has more than doubled infrastructure spending as a share of GDP to above 6 percent, thus spawning numerous big-ticket projects, including the Japan-backed subway in Manila, which is expected to be opened within the coming decade.

Another major source of frustration is the relatively small volume of foreign direct investment (FDI) the country receives compared to its neighbors. Based on the 2023 United Nations Conference on Trade and Development’s World Investment Report, the Philippines attracted only $9.2 billion in FDI in 2022. Southeast Asia’s second most-populous country ranked only sixth among regional peers in terms of FDI inflows.⁴¹ The Philippines’ economic vulnerability, however, is structural. To begin with, major growth engines such as business process outsourcing could face medium-term challenges amid the boom in artificial intelligence, which threatens lower-end service sectors.⁴² Nor is overreliance on remittances a recipe for long-term national development, especially because the Philippines suffers from labor shortages in its own health care and infrastructure sectors. As leading development economists such as Dani Rodrik have argued, overreliance on services sectors in emerging markets tends to create uneven growth, since only manufacturing has economies of scale and historically proven to be a major source of employment for low-skilled workers, who tend to constitute the majority of the population in countries such as the Philippines.⁴³ Accordingly, the Southeast Asian country must transition into a more manufacturing-driven and investment-intensive growth model if it seeks to sustain economic momentum for the long run.

In particular, the government hopes to position the Philippines as the leading “China-free” producer of critical minerals such as nickel, which is crucial to the production of electric vehicle batteries. As the world’s second-largest producer of EV batteries, the Philippine government is weighing regulatory reforms to address uncompetitive production costs as well as create viable investment conditions for strategic partners.⁴⁴

Beyond just a supplier of raw materials, the Philippines intends to become a new destination for manufacturing and high-tech investments. In particular, it is examining how it can become a key beneficiary of a “Taiwan Plus One” strategy, or how it can become an alternative to and extension of Taiwan’s preexisting semiconductor and manufacturing production networks. Unbeknownst to many, the Philippines is already a major producer of semiconductors and electronic devices, with total exports reaching $12.9 billion in 2023 and accounting for 59.3 percent of total Philippine exports.⁴⁵ As this sector continues to develop, the Philippines may be able to become a key partner for the design and packaging of increasingly high-end semiconductors in partnership with Taiwanese counterparts. If anything, northern Philippine provinces, which are around a half hour flight away from major southern Taiwanese cities, can host Taiwanese production sites.⁴⁶

Before it can become the cornerstone of an Indo-Pacific economic and defense strategy, however, the Philippines must overcome its political instability and address its domestic challenges, including regulatory costs and uncertainty, oligarchic capture, infrastructure bottlenecks, and high utility costs. The country should also adopt a proactive industrial policy, focusing on enhancing domestic civilian industries, just as the Philippines builds up its native defense industry.

Historically, many developing countries have had troubling experiences with industrial policy due to, inter alia, regulatory capture and crony capitalism. Instead of creating world-class industries, many developing nations ended up subsidizing either inefficient industries and/or bailing out pro-regime cronies, without rigorous performance-based standards. This was particularly the case under the Ferdinand Marcos Sr. regime, which enriched tycoons and himself but failed to establish a single globally competitive manufacturing sector.⁴⁷ Not to mention, the new climate of protectionism as well as new waves of technological innovations present new challenges.⁴⁸ Against this backdrop, the best industrial policy principles for countries such as the Philippines are the following: (1) focusing on specific sectors, instead of a whole spectrum of industries; (2) adopting strict monitoring mechanisms to enforce performance-based targets; (3) embracing a more collaborative approach in tandem with domestic conglomerates, especially those who are critical to energy supply and infrastructure development; and (4) creating regulatory and infrastructure conditions to attract foreign investors. Regarding the latter, the Philippines should, for instance, (1) subsidize power and water rates in special manufacturing corridors to enhance productivity; (2) develop its own “chips Act” to support R&D as well as small and medium enterprises (SMEs), which are interested in joining semiconductor supply chains in tandem with global investors; and (3) establish a new interagency mechanism—likely led by the Department of Trade and Industry and Marcos’ economic czar Frederick Go with the involvement of Department of Finance, Department of Foreign Affairs and the National Economic and Development Authority—to map, coordinate, and implement support polices for new and emerging industries. And it is precisely here where assistance from external partners is paramount.

Just as talent scouts search for rough diamonds among emerging athletes, rather than chasing the obvious and much-hyped stars, allies such as the United States should help accelerate the Philippines’ emergence as a robust, prosperous, and capable democratic power. Encouragingly, the Biden administration has explored opportunities to upgrade the countries’ economic relations. In 2024, U.S. Commerce Secretary Gina Raimondo visited Manila along with senior executives from twenty-two prominent U.S. businesses and nonprofit organizations to explore large-scale investment prospects. This marked a first-of-its-kind Presidential Trade and Investment Mission by Washington under the Indo-Pacific Economic Framework.⁴⁹

One month later, Marcos attended the first ever japhus trilateral summit at the White House, where the Biden administration reaffirmed its ironclad commitment to its East Asian treaty allies amid rising maritime tensions in the region. The United States and Japan announced joint plans for the creation of an “investment corridor” in the northern Philippines, with special focus on manufacturing. According to the Philippine ambassador to the United States, Jose Romualdez, Washington and Tokyo are exploring up to $100 billion in investment opportunities in the coming years.⁵⁰ Although such rosy projections may prove more fanciful than feasible, even a few billion dollars of high-quality investments by key allies could entice other likeminded powers, especially in Europe, to double down on their economic footprint in the Philippines, especially as industrial powers such as Germany reconsider their overdependence on China.⁵¹

Strategic investments in the Philippines also have a more immediate geopolitical dividend. They can help the Marcos administration to sideline pro-Beijing or China-dependent domestic business groups. In late 2023, Teresita Sy-Coson, the matriarch of the country’s biggest conglomerate, SM Investments Corp., publicly warned of dire economic consequences amid the Philippines’ festering maritime disputes with China. “China is very close to us, we cannot be too antagonistic,” Sy-Coson told reporters, implying that the Philippines should reconsider its assertive stance vis-à-vis the Asian superpower. “Even though we know what is happening, I guess we have to do it through a more peaceful negotiation,” she added, underscoring growing anxieties among the influential Filipino-Chinese business community, who are dependent on imports from and access to Chinese markets.⁵² The episode underscored the importance of securing high-impact investments from Western allies lest Marcos risk accusations of jeopardizing lucrative economic relations with China.

The Middle Power Moment

The Philippines’ geography and its stance against Chinese expansionism in the South China Sea have made it a crucial actor in upholding the stability of the wider region. It is modernizing its armed forces while achieving exceptionally rapid economic growth, putting the country on the path to achieving upper-middle-income status next year.⁵³ Neither a marginal geopolitical player nor an underdeveloped nation, the Philippines is facing its “middle power moment.” “Middle powers” come in many forms, but they fundamentally share three characteristics: (1) a capacity for robust self-defense, and increasing ability to project power in their immediate neighborhood; (2) coalition-building skills through proactive diplomacy; and (3) credible participation in the maintenance of regional and international security.⁵⁴

According to think thanks such as the Lowy Institute of Australia and Hague Center for Strategic Studies in the Netherlands, the Philippines is already a “middle power,” thanks to the size of its economy, modernizing military, and critical role in global diplomacy. In that final respect, the Philippines’ most notable achievement was obtaining the unprecedented arbitration proceeding on the South China Sea that culminated in a binding verdict by a court at The Hague under the auspices of the unclos. The Philippines has, therefore, been able to conduct multilateral diplomacy in the interests of its own security as well as regional stability. But it clearly has a long way to go before realizing its full potential.⁵⁵ The second Trump administration, therefore, should continue to support both the Philippines’ military modernization as well as economic development. On the security front, Washington will have to expedite the transfer of modern warships and fighter jets to boost Philippine military modernization.⁵⁶ In the face of China’s constant “gray zone” attacks, the United States will also have to provide both indirect and, if needed, direct support for the Philippines’ resupply and patrol missions across the South China Sea. One option is joint resupply missions, especially to the Second Thomas Shoal where the Philippines has a de facto military base, as well as the regular presence of American drones and warships over the horizon across hotly disputed areas, including the Scarborough Shoal and the Spratly Islands. Strong diplomatic signals coupled with robust presence on the ground could deter against Chinese aggression.

Given the southeast Asian nation’s limited reliance on Chinese investments, it can serve as a vital and reliable element of a U.S.-led “de-risking” strategy against Beijing. Together with neighboring Taiwan, as well as Japan, South Korea, and the Netherlands, the Philippines could also serve as a crucial node in a “China-free” supply-chain for critical industries such as semiconductors, which have vital national security implications. As U.S. Secretary of State Marco Rubio has argued in the past: “[The Philippine] islands host the world’s largest digital signal processing chips factory. They are also among the world’s greatest producers of cobalt and nickel, critical minerals for twenty-first-century supply chains. Our ability to maintain great power status would be severely diminished were they to fall under communist control.”⁵⁷ A capable and prosperous Philippines will not only be a reliable ally for the United States, but also a pillar of a rules-based order in the Indo-Pacific.

The ongoing feud between the houses of Marcos and Duterte is, therefore, a struggle for the soul of one of the most promising and strategically vital nations on the globe today. And key partners, especially the United States, have a huge stake in the success of forces that conduce to strategic and institutional stability within the Philippines as well as in the steady emergence of the Southeast Asian nation as a capable partner and a full-fledged “middle power” at the heart of the Indo-Pacific.

This article originally appeared in American Affairs Volume IX, Number 1 (Spring 2025): 123–43.

Notes