Opening Remarks of Secretary Teodoro Locsin, Jr at US-Philippines Society Business Forum in Manila



Forum on “U.S., China and Regional Power Dynamic: Competition and Cooperation on the Eve of a New Decade”

US-Philippines Society Board of directors Meeting

18 February 2020, 0900H- 11000H, The Peninsula Hotel, Makati


Ambassador John D. Negroponte,

Mr. Manuel V. Pangilinan,

Ambassador John F. Maisto,

Ambassador Thomas C. Hubbard,

Mr. Hank Hendrickson,

Distinguished Board of Directors,

Colleagues in Government

Ladies and gentlemen,


Good morning. It is a great pleasure to be here.

I wish to thank the U.S.-Philippines Society for organizing this activity.  This should stir our minds with prospects for the future in the Asia-Pacific region. I hope that our exchange of ideas will lead to a more nuanced understanding of our current reality and how it came to be. But I wouldn’t bother with a historical context. There isn’t one and hasn’t been one for some time, except the return of the Balangiga Bells, which was deeply felt by one man who really matters, and whose return was not without great cost to the US Ambassador whom I have rightly praised as the best of the best in my long recollection and, despite everything that’s happened recently, the one who kept alive the mutual affection of all Filipinos and Americans today.

But I think that when Fukuyama broached the idea of The End of History he had no idea that all it would mean was that thenceforth decisions and events would proceed with little if any actual historical antecedent let alone conscious and deliberately considered precedent. In the place of those factors would be anything that came to mind to do, and any reason that arrived the same way as a justification for an impulse indulged without forethought and — and this may be its one redeeming feature, without any expectation of being taken seriously. Decisions would be made on the fly — grave decisions to attack and withdraw with arms when that was context and with uttered words unlike arrows shot with no intention being taken seriously. And the reversal would be just as whimsical and opportunistic. In such a situation nothing is too farfetched this morning for intellectual consideration.

And so I laud the unflagging efforts of the U.S.-Philippines Society for its unfailing sense of history and sensible purpose; for memories fond and true; and thoughts considerately influential in their utterance and consequence. The Society was forged in the spirit of the abiding friendship between the Philippines and United States. And since 2012, it has been a sturdy oar that has tried and at times helped to propel and steer our two countries’ longstanding friendship in turbulent waters into currents of mutual advantage despite unpredictable changes in wind and tide. And here with us, though they don’t have to be and there’s no advantage for them to be here — are among the best in US diplomacy: John Negroponte whose presence is so strong he may as well be here in the flesh; John Maisto (who is family in the South); Thomas Hubbard, and Hank Hendrickson, The Constant Gardener of US-Philippines special relations, keeping the grass mown, hedges trimmed, raking the dead leaves, and turning up the soil.

First, let me share the broad strokes of our Foreign Policy, vis-à-vis prevailing regional dynamics involving two significant actors — the United States and China.

Philippine Foreign Policy

The Philippine Government pursues an independent foreign policy – fundamentally, the grain of the Philippine Constitution, and the consistent directive of my President. The paramount consideration in our foreign relations is the promotion and protection of our sovereignty and national interest. This means, among other things, that we reject any interference in our sovereignty, particularly its most defining aspect: a sovereign state’s monopoly in the dispensation of justice and expectation of its international recognition and respect. We expect this to be understood especially by Americans because the Philippine justice system is a mirror image; indeed it is a conscious imitation of the American model and American practice. The felicities are the same and so are the flaws; the kind of people who run it are exactly the same under the skin; with about the same prospect of real justice done as of justice failing instead. Americans and Filipinos are both only human and their enduring frailties and sporadic strengths are the same. So both must be careful about criticizing the other on that score.

On the international front, any and all partnerships that we enter into, and any initiatives we have taken regionally or in a multilateral setting, are taken to advance the national interest. With this consistent attribute: it is never consciously done at any other’s expense and it is undertaken hopefully to everyone’s advantage. We’re just like that. We don’t like to make enemies. We like to make new friends. But one day we had to. That friend took Scarborough Shoal. And our oldest friend let it. But that no longer matters, as I said; that isn’t an important factor in decision making although it provides a convenient excuse.

As diplomats we like to say that we continue to work on enhancing our ties “with traditional partners like the United States.” But the United States is not just a traditional partner: it is our only military ally and major influencer in international affairs — indeed the only conceivable one given geography and more importantly our deeply held and strongly shared political ideals regarding freedom not least from b.s. There is too our common temperament and psychological inability to abide by any political belief or practice other than the rule of law and pure democracy at home and abroad. Like Americans, in adhering to the rule of law we avoid inflicting self-harm by distinguishing between political abuse and plain vanilla criminal activity like drug dealing. We think that the misconceived but nicely phrased United Nations’ “duty of a state to protect” extends first, and stays foremost, that of protecting the good from the bad. And of course knowing the difference which does require some semblance of due process.

We cannot abide masters: in our own homes any more than we can stand masters over our country other than ourselves. The United States is in a class by itself in Philippine affection and intellection. China is nowhere close in that respect; but then again it is nowise an enemy. It wasn’t an enemy of the United States either; not by a long shot and not for a long time. And, again, that is what we had in common in that regard.

China possibly is a more mutually advantageous partner in economic relations if only for its proximity. Our relations with Japan more than with China prove the truth of that dictum: near is nice and convenient though also worrisome. We value China for the material prospects it offers as much as our neighbors do; indeed as much as the rest of the world does: China is our last best chance to get rich finally.

It was so even for America — until it wasn’t. So do not be surprised with the flurry of catch-up the Philippines displayed after 2016. We had to join in before we were completely left out. The US was China’s best investor and partner; taking the place of Japan — the first to massive infuser of money, material and markets towards China’s astonishing progress. We had stayed away. China seemed too big, too strange, too rowdy. Those who had first tried to do business there lost money. We didn’t understand the market not least because there wasn’t a developed one at the time, safe for small players. We didn’t join the AIIB until we were the last one knocking on the door of a house packed to the rafters with North American and South American, European, Asian and African countries — all with their hands out for Chinese money and opportunity. We were the last to join the Belt and Road. So now we’re playing catch up with a frenzy. And as usual the frenzy has generated more heat than useful light.

Philippines-US Relations

The ties that bind the Philippines and the United States are longstanding and extensive. More than our diplomatic relations spanning over seven decades, we share more than a century of history as allies, brothers in arms, and kindred spirits pulled together by the same ocean that separates our countries and mercifully keeps us friends at a comfortable distance: too far to meddle in our internal affairs but close enough to come to each other’s help in the mutual defense. That hasn’t change and it need not.

Let me say this slowly: the last VFA is no more the final expression of our mutual defense interest and special relations than the US Bases were. The inconceivable happened despite the best efforts of President Corazon Aquino at home and Richard Armitage and I at the Pentagon. The bases left but nothing else changed. We just ended up with a lot of empty space — until we didn’t only recently.

But Philippine-US friendship is bigger than our mutual defense requirements and its roots are buried far deeper in the earth of shared democratic beliefs, attitudes in life, values and vices in practice. The intergenerational bond and goodwill between our peoples remain ingrained in the social psyche. A Social Weather Station (SWS) survey that covers the 3rd quarter of 2019 revealed that the country Filipinos trust most has always been the United States (+72), and the one they trust least is China (-33) at 9 points lower than its 2nd quarter rating. – vox populi, indeed.

When President Trump visited Manila in November 2017 for the US-ASEAN commemorative summit, he exhorted America’s partners in the region “to be strong, independent and prosperous, in control of their own destinies, and satellites to no one.” I guess somebody took the hint and was dismayed at the weakness of our national defense. My president has done more to start creating a credible military establishment than all his predecessors since Quezon.

Recently, notwithstanding the serving of the notice of termination of the Visiting Forces Agreement by the Philippines, President Trump reiterated that he has a “very good relationship” with President Duterte. That’s real. When I went to Washington on the eve of serving notice of VFA’s termination, I said that in the end the future of our arrangements —not relations, that will not change — in defense, trade and what have you depends on these two leaders one day sitting down and talking about them. As I said, history is no longer the driving force of history: it is personality.

To be sure, President Duterte’s independent foreign policy did not take its cue from President Trump’s call for its allies, especially in Europe, to invest more in their national defense so as to stand strong and straight alone and thereby stand stronger and straighter alongside the United States in the face of common enemies of freedom. The US tends to treat its strong friends with more respect for the strength they can add to mutual defense and shared security purposes. Respect is not just important. It is key. And in the case of US-Philippines relations there’s been a lot of that lacking on both sides.

On the economic front, the U.S. is the Philippines’ 3rd largest trading partner at US$18.70 Billion (registered at end 2018), our biggest export market and our 4th largest import source. The Philippines also enjoys preferential treatment on its exports to the U.S. as beneficiary of the US Generalized System of Preferences (GSP) and will continue to be such until the end of 2020. Our GSP exports account for 16 percent of our total exports to the US, valued at an estimated $1.7 billion in 2018. The US is the Philippines’ 5th largest source of investments accounting for some PhP12.9 Billion in 2018. The US is also the Philippines’ 3rd largest tourism market with over 1 Million tourist arrivals in 2018. Finally, with respect to Official Development Assistance (ODA), the US is the largest source of grants (there are no loans) accounting for 36.89% share of total grants in 2018 at US$886.47 Million.

Philippines-China Relations

The Philippines’ relations with China are fairly new. No, we never had the much vaunted but completely mythical ancient ties with the Celestial Kingdom which, for millennia, was a world sufficient unto itself. In fact, as I told the Chinese foreign minister, China had spent all that time getting its act and keeping its huge and friable parts together.

But we were never enemies of China; not even in the Cold War. After an American journalist, Felix Greene, breached the Bamboo Curtain to reveal the truth about the China behind it — it really was poor but it was also proud and would not trade its poverty for submission, I followed a year later in 1967. I went into China to see for myself.

I saw a country that was taking its state religion seriously: that religion was Communism. Later when I visited my daughter studying in Beijing, her classmates remarked that we had much in common: Filipinos, for example, were Catholics and they were Communist; we had the Church, they had the Party; we did not share but we had each in a formalistic sense a singular worldview and an exclusive prescription for salvation: blind belief and steadfast practice. I didn’t have the heart to disappoint them by saying that Filipinos are Latin Catholics which is to say we profess louder than we practice our deepest beliefs. And the politico-cultural religious impulse was seriously diluted by American pragmatism and democracy. 50 years of Hollywood almost completely erased four centuries in a convent. The wimple was no competition to long, wavy, shiny shampooed hair in TV commercials. And guess what it’s conquering China too.

The Cold War technically divided us; but emotionally we never felt the division. We were never anti-Chinese; to start with quite a few us are Chinese in part.

So it was easy to become friends when the Cold War ended. Cory Aquino, from a famously landed family, accepted a state visit to China as among her first officials acts; studiedly shunning Soviet Russia for sticking by Marcos even after he was doomed. China had shown more alacrity in recognizing her government.

President Duterte’s policy since assuming office has further strengthened this friendship. He has remained keen on furthering cooperation with China; while I have contributed tremendously to our present good relations with China as Secretary of Foreign Affairs. I have seen and know more about China than the officials I deal with there. I’ve been around I am sorry to admit a long, long time.

Economic cooperation is the linchpin of Philippines-China bilateral relations.     Our economic and trade cooperation have reached unprecedented heights since 2016. The Philippines aims for inclusive and sustainable growth to ensure that development will also reach the poor — a principle China values and practices: it has raised anywhere from 400 million to 600 million Chinese from utter destitution into the middle class by most definitions of that category.

Philippines’ trade relations with China are expected to become even more robust in the coming years. Our exports to China grew by 9.97%, from USD8.02 billion in 2017 to USD22.01 billion in 2018. Chinese investments in the Philippines have grown steadily in the past decade, though nowhere close to Japanese investments which try to overmatch any Chinese proposal with more generous terms. It is how Japan is pushing back China in Southeast Asia: by outbidding it. Even we are beating China in that regard. Philippine investments in China are far bigger than Chinese investments in the Philippines.

But just like with the United States, the Philippines strives to balance its relations with all countries with the ultimate goal of promoting our national interest while acting as a responsible member of the international community. We have taken the position that the South China Sea issue does not encompass the entire breadth of Philippines-China relations. But, and this is a big butt, we never fail to impress on China that the South China Sea issue is the final litmus test of the long-term viability of our relations. As I said, we will never yield an inch of what is ours by law in the South China Sea.

Philippines, U.S., China, and the Regional Power Dynamics

Among the Philippines’ major trading partners, the United States accounts for the highest export value, while China had the highest import value, as of July 2019. Exports to the United States comprised the highest value while China was Philippines’ biggest supplier of imported goods for the same period.

Without a doubt, the recent U.S.-China competition, almost trade war, will continue to significantly shape geopolitics in the Asia-Pacific region. The long arm of this competition will reach not only the entire breadth of the region but also globally. The recent Phase One U.S.-China trade deal is a welcome development for the Philippines.  It helps reduce the trade tensions that have adversely affected the international status quo. The Philippines hopes that the dialogue between U.S. and China will continue to further stabilize the situation. While we see a seeming respite between the U.S. and China, the effects of the trade war saw a shift in favor of emerging economies, particularly in Southeast Asia. Developments have shown the necessity for countries to diversify their supply chains, and that Southeast Asia has the capability to position itself as a strong alternative if push comes to shove. But let’s hope not. Because when things were going well between the US and China, we were all profiting from it.

I have warned colleagues in government against peddling the line that in a trade war we stand to benefit as an alternate site. The last time we did that was when Hong Kong was in the throes of Red Guard riots in the late 60s. Hong Kong retaliated in damaging ways you cannot imagine; not least by picturing the Philippines all over the world as the last place to go for any sane investor. We did it again when the Handover was about to happen. But we were so down and out at the time that Hong Kong didn’t notice. The best revenge is living high on the hog as Hong Kong did after the Handover — becoming bigger and richer than it had ever been or could ever be under the British. And then of course our police shot their tourists in the attempt to save their lives. When the Umbrella Revolution was happening; and many in the West rejoiced that China was suffering the penalty of overreach into its own historical territory at that;  I went to Hong Kong uninvited and called up Carrie Lam to ask her if I could be photographed standing by her in her and her great city’s troubles. She was stunned and I hope delighted. And I like to think I have made up for all our mistakes with regard to Hong Kong.

In conclusion, the Philippines will continue to explore new markets and cooperation with other countries without sacrificing our special relations with the United States. We wish we could, for safety, diversify our special relations; it would be to everyone’s benefit. The US no more wants to be dragged into our conflicts than we want to be dragged into its wars. The US made that very clear during China’s emergence into an assertive great power. But meanwhile a bird in the hand is worth two in the bush especially when one bird has flu and the other may soon fly. Thank you. I trust I have been cautiously obscure. Now I leave you to speculate as much as you like about the future; your guess will be as good as mine. The crystal ball on offer is a billiard ball in its opacity and it has the number 8. #

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