In a deliberate attempt to stave off a diplomatic crisis with Beijing, President Duterte contradicted Filipino defense and military officials and downplayed the collision of a Chinese vessel into a Filipino fishing boat as a maritime accident rather than a direct attack. Most Filipino officials see this incident as jut the latest of China’s attempts to maneuver for control of the South China Sea.

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.

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.

Warming political ties over the past three years are beginning to produce economic and security dividends for both China and the Philippines. However, low public trust in China may not easily dissipate.

The Filipino president is facing domestic backlash over his Beijing-friendly policies amid crucial midterm elections, which serve as a referendum on Rodrigo Duterte’s presidency.

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.

Since coming to power, President Xi has sought to charm estranged neighbors through an enticing package of infrastructure investments and development assistance, and the Philippines has emerged as the crowning jewel of this ‘peripheral diplomacy’ strategy.

China-Philippines relations have a bright future under Xi and Duterte.

President Xi visit caps two years of warming ties oriented towards dispute management, confidence-building, and expansion of economic, security and people-to-people connections.