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President Joe Biden, Fumio Kishida, and Ferdinand “Bongbong” Marcos Jr. held the first-ever Japan-U.S.-Philippines trilateral summit on April 11th. This was an expression of the importance of the United States’ Indo-Pacific strategy. We work with partners and allies to emphasize both military and economic security. The Biden administration has emphasized that ensuring a deep and resilient partnership requires both economic and military support. That is especially the case as the three leaders pledged to work toward a shared vision of a free and open Indo-Pacific “for decades to come.”
Security and the South China Sea
The Philippines’ deepening strategic alignment with the United States, Japan, as well as Australia and other partners is a response to China’s coercion. In late March, two Chinese Coast Guard vessels used high-pressure water cannons on a Philippine supply ship heading to No. 2 Thomas Shoal, severely damaging the ship and injuring two Filipino sailors. Despite this invasion, the Philippines successfully completed replenishment missions on a monthly basis for two years despite the Chinese invasion.
The United States and Japan both reiterated their support for the Philippines and condemned China’s actions in response to the recent violence at Second Thomas Shoal. Secretary of State Antony Blinken visited Manila that week and reiterated the United States’ determination to support the Philippines and respond to Chinese aggression, if necessary, as required by the U.S.-Philippine Mutual Defense Treaty. And on April 7, naval vessels from the Philippines, Australia, Japan, and the United States conducted the first-ever four-way exercise within the Philippines’ exclusive economic zone in the South China Sea.
This momentum carried over into the Washington summit, where President Biden and Prime Minister Kishida expressed support for the Philippines and announced several new concrete measures to support Manila’s maritime capabilities. The three countries will conduct a trilateral coast guard exercise in Philippine waters, and for the first time this year, Philippine and Japanese personnel will board a U.S. Coast Guard vessel patrolling the Indo-Pacific. The United States and the Philippines also announced plans to deepen cybersecurity cooperation. This was a particular priority for President Marcos, given that China-based hackers have frequently targeted Philippine government systems in recent months. The Philippines’ improved cyber capabilities could also advance the torturously slow process of finalizing the General Security of Military Information Agreement (GSOMIA), which both governments have pledged to conclude at the end of 2021. .
focus on economics
The United States and Japan have increased their economic engagement with the Philippines in recent years for a variety of reasons. The Philippines is one of the fastest growing economies in Southeast Asia, creating opportunities for key industries such as electronics manufacturing, healthcare, and the semiconductor industry. The Philippines already enjoys a strong trade and investment relationship with the United States, with more than $18.9 billion in goods and services traded in 2020. The United States is the Philippines’ third largest trading partner and one of its largest investors. Commerce Secretary Gina Raimondo’s visit to Manila in early March reflected this. She brought with her a delegation of senior executives from 22 prominent U.S. companies and nonprofit organizations during her trip. Participants announced more than $1 billion in recently completed and anticipated investments in the country. Meanwhile, Japan is steadily expanding its economic involvement with the country, and it is also a major trading partner. It is the Philippines’ second largest export destination.
The tripartite meeting and subsequent announcements revealed further investments based on this economic engagement, which also reflects national security concerns about Chinese investment theft through the Belt and Road Initiative and digital infrastructure projects. The United States and Japan aim to accelerate investment in the Philippines through both their own public and private sectors, as well as through the G7 Global Infrastructure Investment Partnership (PGII) initiative.
The Marcos administration recognizes that the Philippines has security vulnerabilities due to the proliferation of Chinese communications equipment and networks, but until now there have been few alternatives. The United States and Japan, especially the latter, are bullish on open radio access network (ORAN) technology and see opportunities in the Philippines. The Marcos administration is considering drafting and implementing an ORAN regulation in order to facilitate the adoption of ORAN. To provide an incentive for this, the United States and Japan will fund ORAN field trials to determine if the market is ready for commercial deployment, as well as to improve the skills of the telecommunications workforce. It also funds an “Open RAN Academy” for capability development. Required to test and deploy open network architectures to promote an open, interoperable, reliable, and secure Internet.
The United States and Japan will also contribute to strengthening the Philippines’ role in the semiconductor supply chain, an important initiative by national security allies. The United States already designated the country last year for funding from the International Technology Security and Innovation (ITSI) Fund for CHIPS and Science Law. The funding was aimed at a comprehensive assessment of the Philippines’ existing semiconductor ecosystem and regulatory framework, as well as its workforce and infrastructure needs. The Philippines wants to become a bigger player in the supply chain, especially in the development of high-tech chips, but lacks manpower and technical capacity. Investments in both industry and workforce will begin to gradually narrow these gaps and create the resiliency her three partners are seeking in this critical industry.
Multilateral cooperation was also taken up at this summit. Linking to Africa’s Lobito Corridor and the India-Middle East-Europe Economic Corridor, the Indo-Pacific’s first PGII Economic Corridor will be built in the Philippines, connecting Subic Bay, Clark, Manila and Batangas. Luzon Corridor infrastructure projects include railways, port modernization, clean energy projects, agribusiness and cold storage facilities, and civil port renovations. Details of specific investments and projects will be announced at the Indo-Pacific Business Forum to be held in Manila next month. These multimodal corridors will demonstrate the effectiveness of partners sharing their respective financial and professional resources and collaborative efforts to provide high-quality and transparent infrastructure to counter China’s Belt and Road Initiative. The purpose is to demonstrate both.
Finally, the United States announced the opening of a U.S. International Development Finance Corporation (DFC) office in Manila. DFC is a U.S. development bank that seeks to mobilize private sector capital in markets like the Philippines. DFC focuses on energy, telecommunications and healthcare, all areas of importance to the country. DFC is also working closely with the Japan Bank for International Cooperation (JBIC) and announced the renewal of the cooperation MOU just before Prime Minister Kishida’s visit, ensuring further efforts by both companies to work together to promote investment in the Philippines. I have to. .
Strategic imperatives for economic security
All of these measures are important in efforts to help the Philippines resist Chinese pressure, and the symbolism of the summit is even more important. Those looking for more detailed artifacts on the South China Sea may have been disappointed. However, this overlooks several points. First, the drumbeat of maritime safety announcements from the United States and the Philippines, and between Japan and the Philippines, has been fairly constant for two years. Second, more sophisticated U.S.-Philippines-Japanese military cooperation will likely have to await the conclusion of a reciprocal access agreement between Tokyo and Manila, which both countries hope to conclude this year. Third, and most importantly, a much longer list of economic outcomes is key to strategic relationships, not secondary.
The summit also undermines the argument that the United States is not economically engaged in the region and that its partners and allies cannot offer viable alternatives to China. By investing in the Philippines’ infrastructure, digital economy, critical minerals and semiconductor supply chain, Japan and the United States will ensure that their engagement is deep and lasting, and not simply dependent on maritime tensions with China. It is shown that. They also aim to prove that partnering with Tokyo and Washington can bring public goods to Filipinos and economic growth to the nation. This would allow President Marcos to counter domestic critics who argue that by standing up to China he is sacrificing the potential economic benefits Beijing could offer. And by helping the Philippines maintain its strong economic performance (expected to be the first or second fastest growing economy in Asia for at least the next two years) and avoid over-reliance on China. , Washington and Tokyo will be able to minimize Manila’s economic crisis. It could expose it to economic retaliation from China.
At the conclusion of the historic summit, Biden, Kishida, and Marcos declared the beginning of a “new trilateral emblem among our three countries.” It will be a chapter focused on ensuring both national and economic security.
Erin Murphy is a senior fellow in the Asia Program at the Center for Strategic and International Studies (CSIS) in Washington, DC. Gregory B. Pauling is a senior fellow and director of CSIS’ Southeast Asia Program and the Asia Ocean Transparency Initiative.
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