Philippine president Rodrigo Duterte has sent mixed signals about how he will pursue his country’s South China Sea arbitration award against China in 2016, and his recent rhetoric promising to take a tougher stance on China may not come to fruition.

While unable to alter Duterte’s diplomatic strategy towards China, the influential and largely autonomous Philippine defense establishment is conducting a parallel China policy of its own. The result is a dualistic foreign policy, combining both engagement and deterrence.

Recent US Navy drills in the South China Sea invited old friends like Japan and the Philippines, but also new partners like India. An expanded US military presence in these disputed waters is part of America’s “Indo-Pacific Strategy” to block Chinese military expansion — and perhaps to apply pressure during ongoing trade talks.

Despite Duterte’s fiery anti-US rhetoric, the Philippines and the US retain their strong military alliance. Similarly, on China-Philippines relations, Manila’s bark is worse than its bite — alongside South China Sea disagreements, the two sides have rapidly expanding economic ties. A bilateral (not trilateral) approach, with respect for each side’s red lines, is the key to avoiding escalation and deepening cooperation.

Continued friction may define US-China relations in the coming years. As such, balancing ties between the two major powers will constitute the greatest foreign policy test for successive Philippine administrations.

With big-power competition intensifying in the South China Sea region, the Philippines could be dragged into conflict. Reviewing the terms of the US-Philippine Mutual Defense Treaty can only provide minimal security for the entangled Philippines nation.

The Philippines has announced that it will review the 1951 US-Philippine Mutual Defense Treaty, raising questions about the future of the Philippines’s relations with the U.S. and China. The review, however, also provides a unique opportunity for the two allies to upgrade their partnership.

President Trump’s attendance at the recently concluded ASEAN Related Summits held in Manila suggests continued U.S. interest in a region touted as among the key engines of global economic growth and development. This is crucial as ASEAN celebrates its golden anniversary amidst fast changing regional dynamics.

After five months of intense firefights between government troops and Islamic State (IS)-affiliated militants, the Battle of Marawi is now effectively over. Yet, the specter of terror in Mindanao is far from over. The Philippines may have managed to contain, at least for the meantime, the prospect of an IS stronghold in its backyard, but religiously inspired extremism and violence will continue to haunt Mindanao for the foreseeable future.

After his first year in office, Rodrigo Duterte has arrived at three key realizations: first, it has become increasingly clear he doesn’t have the power to unilaterally shape his country’s defense policy; second is how far he can distance the Philippines from the U.S.; and third, expanding cooperation between the Philippine military and the Pentagon will constrain Duterte’s outreach to China.