The Philippines is significantly upgrading defense ties with Australia and other Western partners amid growing tensions with China in the South China Sea, underscored by large joint exercises and plans for expanded troop access. Yet despite China’s overwhelming military advantage, both Manila and Beijing share responsibility to de-escalate tensions and pursue diplomatic solutions, especially as the Philippines prepares to chair ASEAN next year.
Filipino and Australian troops conducted their largest-ever joint exercises, the Combined Joint Forcible Entry Operations (CJFEO) for Exercise ALON 2025, which took place in the western island of Palawan embracing the South China Sea, Aug. 24, 2025. (Photo: X)
“Both sides agreed to undertake projects that increase our combined collective capability, enhance interoperability and strengthen bilateral and multilateral defense cooperation,” declared Australian Minister of Defense Richard Marles and Philippine Secretary of National Defense Gilberto in a joint statement. The two U.S. allies vowed to pursue projects that jointly “strengthen the Philippines’ territorial defense capabilities” while ensuring the Southeast Asian nation “maintain[s] full sovereignty over all its sites,” indicating a major upgrade in bilateral defense ties.
By all indications, the two countries, which already have a bilateral Visiting Forces Agreement, are set to embrace their own version of U.S.-Philippines Enhanced Defense Cooperation Agreement (EDCA), thus enabling rotational deployment of Australian troops and weapons systems to designated facilities. As many as “eight different infrastructure projects across five different locations” will be opened up to Australian forces across the Philippines.
The announcement came shortly after Filipino and Australian troops conducted their largest-ever joint exercises, the Combined Joint Forcible Entry Operations (CJFEO) for Exercise ALON 2025, which took place in the western island of Palawan embracing the South China Sea. As many as 3,600 personnel from the Armed Forces of the Philippines (AFP), the Australian Defense Force (ADF), United States Marine Corps and the Royal Canadian Navy took part in the drills, with Japan, South Korea and New Zealand deploying observers – underscoring the Philippines’ emergence as the pivot of a new network of likeminded Indo-Pacific powers.
Crucially, the new pact and massive joint exercises between Manila and its Western allies came on the heels of a near-collision between Philippine and Chinese maritime forces near the contested Scarborough Shoal. In early-August, a People's Liberation Army Navy (PLAN) warship accidentally rammed into a China Coast Guard (CCG) vessel, which, in turn, was chasing a Philippine Coast Guard (PCG) patrolling in Beijing-claimed waters.
Tensions further rose after the U.S. deployed two warships to the area in support of its Southeast Asian treaty ally, prompting countermeasures by Beijing, which deployed warships and a fighter jet to “drive away” the foreign forces from the area. The whole episode underscores the perilous turn in the South China Sea tensions, but also the determination of both Manila and Beijing to defend their core interests. With the Philippines set to assume the rotational chairmanship of Association of Southeast Asian Nations (ASEAN) next year, there is opportunity for de-escalation and proactive pursuit of a mutually acceptable long-term diplomatic solution.
The exact circumstances of the latest tussle in the South China Sea is shrouded in contradictory statements. China has accused the Philippines of provocation and maintains that it was simply engaged in a “professional, standardised, legitimate and legal” against intruding Philippine vessels in the Scarbrough Shoal – a contested land feature that has been under Beijing’s de facto control following a months-long Sino-Philippine naval stand-off in 2012.
The Philippines, which also claims the contested shoal, maintains that it was simply exercising its sovereign rights within its 200 nautical miles Exclusive Economic Zone. Top Filipino officials claim that the incident demonstrates China’s increased risk appetite[1], including the will to directly assault Philippine vessels.
What’s clear, however, is that the South China Sea disputes are entering a dangerous phase. There are clear risks of deadly clashes and, even, a superpower power showdown. America has clarified that its Mutual Defense Treaty with Manila covers any attack on Filipino troops, public vessels and aircrafts in the South China Sea area.
Both the Philippines and the U.S. have also warned China against militarizing and reclaiming the contested shoal, which lies just above 100 nautical miles away from strategic Filipino facilities in Subic Bay. Wary of escalating tensions, Manila has shunned deployment of warships to the Scarborough Shoal. But the Southeast Asian country is doubling down on its security cooperation with Western powers by, inter alia, even offering to host American and Australian troops in strategically-located facilities.
By every measure, China is the dominant party in the South China Sea disputes. Its annual defense spending ($314 billion in 2024) is 50 times larger than that of the Philippines’ ($6.1 billion in 2024). Not to mention, China not only boasts a far larger standing army, but also multiple fifth generation fighter jets, multiple aircraft carriers, and among the world’s largest navies. The Philippines is yet to possess even a full-fledged fourth-generation fighter jet, while only recently acquiring more modern mid-sized warships.
Eager to close the yawning gap, the Southeast Asian nation is drawing in Western powers and leveraging defense aid from and cooperation with a wide range of likeminded Indo-Pacific nations. Manila’s attempts at enhancing its own defense capabilities, however, has spooked China, which worries about a U.S.-led containment strategy. What seems to have further enraged Beijing, however, is Manila’s increasingly unambiguous embrace of a U.S.-led strategy on Taiwan, especially as the Pentagon expands military presence and drills across northern Philippines.
The upshot is a dangerous strategic deadlock. Moving forward, the two countries should pursue confidential-building measures, drawing on the “provisional agreement” experiment in the contested Second Thomas Shoal, where Filipino and Chinese officials created hot-lines and mutual notification mechanisms. Both sides should also refrain from deploying warships and/or conducting massive wargames in the area, thus limiting any maritime contestation to their civilian coast guard forces.
To avoid any misinterpretation, Manila should also calibrate its language on the Taiwan issue – an extremely sensitive issue for Beijing – by, at the very least, refraining from openly declaring any potential involvement in any military contingency against China. On its part, Beijing should understand that the Philippines will have to prepare for any potential conflict to its immediate north. And it’s natural for weaker neighbors to seek help from powerful nations to balance the scale in the South China Sea.
With Manila set to assume ASEAN chairmanship, and top world leaders expected to visit the Philippines next year, it’s high time to not only expand bilateral Philippine-China dialogue but also to double down on Code of Conduct negotiations in the South China Sea. There is no magic bullet for the seemingly intractable disputes, but Manila and Beijing have a shared responsibility in de-escalating tensions as well as mitigating their current security dilemma with diplomatic finesse in the interest of regional peace and security.
[1] Based on conversations with top Filipino admirals and maritime officials shortly after the incident.
