Caught in between, US or China: How Strategic Alliances from US or China Can Propel the Philippines' Economic Growth
- lightningszenith
- Mar 26
- 4 min read
By: Karl Xyras Christian Barrantes, Amber Jillian Caras, Terence Dominic Nolasco, Azriel Wayne Omalza, Frances Jaela Palestroque
The Philippines stands at a crossroads, caught between fostering stronger ties with either the US or China. While the US offers a partnership on strengthening democracy, building defenses, trading ties and security, China fuels economic development through projects and economic expansion. Both alliances offer distinct paths of growth, but as a democratic nation, it is ultimately up to the Filipino people to decide the country's fate. Whether the nation’s future lies with the US or China, their choice will determine the direction of the country's economic growth and international alliances.
The Philippines is in a dilemma, managing its ties with two global powers, the United States and China. Both
nations offer distinct economic, political, and military benefits; A crucial role is being played by the two nations in the country's long-term growth and security. While China heavily invests in infrastructure and trade, the United States remains a reliable partner in defense, governance, and economic stability. This paper explores and contrasts these alliances to determine which path best ensures the Philippines' future prosperity.
In recent times, President Bongbong elaborated on a flexible political policy of neutrality, whilst still leaving room for joint military ventures between the Philippine Army and the US Army amid the growing conflict in the West Philippine Sea. Economically, the policy remains within the influence and funds of the US government, either maintaining or completely removing any economic influences coming from China. Major investments from American businessmen have stimulated the economy ever since the resurgence of pro–American sentiment from the government, around$3.6 billion have been given to the Philippines’ commercial functions to support its budding economy. However, certain spiteful actors within the same government hamper and mischaracterize the role of the US government within this joint economic venture.
The United States and China are both essential in playing a role in the Philippine economy. The U.S. allocates
approximately $120 million annually to foster market-driven growth, strengthen military institutions, and improve the quality of essential services such as education and healthcare (Quitzon & Poling, 2024). Additionally, U.S. investors have played a major role in boosting Philippine exports, especially in the electronics industry. Investments have reached $12.9 billion in 2023, exceeding China’s $8.17 billion (China Briefing, 2024).
Despite ongoing tensions, China’s investment in the Philippines from two decades (2000-2022) provided over $9
billion in development finance, then from 2010-2023 Chinese firms committed to investing $22 billion in FDI (Foreign Direct Investment). The investments from China have supported various projects from major infrastructures to smaller community initiatives, facilitated by multiple Chinese state-owned enterprises and international financial backers (China Briefing, 2024). With ongoing economic tensions, trade between the Philippines and China remains in good condition, reaching $41 billion in 2023, surpassing the U.S.-Philippines trade by a small margin, which totaled $36.1 billion (Philippine Department of Trade and Industry, 2023). While China’s infrastructure support has been substantial, concerns persist regarding debt dependency and political influence.
Investments from China have supported various projects from major infrastructures to smaller community
initiatives, which are facilitated by multiple Chinese state-owned enterprises and international financial backers (China Briefing, 2024). With ongoing economic tensions, trade between the Philippines and China remains in good condition, reaching $41 billion in 2023, surpassing the U.S.-Philippines trade by a small margin, which totaled $36.1 billion. While China’s infrastructure support has been substantial, concerns persist regarding debt dependency and political influence.
Political and military relations play a crucial role in shaping the Philippines' strategic position. The United States
has been a longstanding defense partner, providing $463 million in military aid, with an additional $128 million allocated for 2025 (U.S. Department of State, 2024). Under the Enhanced Defense Cooperation Agreement (EDCA), the U.S. has the authority to deploy troops and establish military facilities in the Philippines, strengthening security in the West Philippine Sea as territorial tensions with China intensify (Reuters, 2024). In contrast, China has been at the center of diplomatic and territorial conflicts with the Philippines. Although trade relations remain robust, China's assertive territorial claims in the West Philippine Sea directly threaten the sovereignty of the Philippines. While China continues to extend economic incentives, its expansionist actions raise serious concerns about the erosion of the Philippines' maritime rights (Inquirer.net, 2024). The 2016 Hague ruling, which invalidated China's territorial claims, remains a significant point of contention, as Beijing refuses to acknowledge it, leading to ongoing naval confrontations.
China has provided significant support to the Philippines by investing in various projects. These contributions
have been instrumental in enhancing infrastructure benefitting both large-scale initiatives and smaller communities. Despite existing political challenges, China has remained an essential economic partner for the Philippines highlighting the significance of continued collaboration for the Philippines' economic growth.
Based on economic, political, and security concerns, aligning more closely with the United States would be in
the Philippines' best interest. China's infrastructure investments are significant, yet they often come with the risks of territorial tensions and financial dependency. Meanwhile, the U.S. offers a more stable economic partnership, democratic reinforcement, and military support to defend Philippine sovereignty. For long-term national stability, the Philippines should deepen its engagement with the U.S. while carefully managing economic ties with China. This approach ensures sustainable growth, strengthens national security, and preserves political independence.
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