As a former U.S. colony, the Philippines has maintained close ties with the United States on security issues for decades, and may quickly become a key player in Washington’s plans in the Indo-Pacific as China tests their claims across the South China Sea.

The rhetoric of the United States is designed to stoke fear and amp up tensions so that it can more easily form an alliance against China. Playing up the threat theory, however, only shows helplessness as China exercises its maritime rights.

Over the last four years, the Philippines has proven to be the U.S.’s most cooperative partner in Asia, embodied by famously warm relations between Presidents Donald Trump and Rodrigo Duterte. The Philippines’ close proximity to China and it’s disputed waters makes it an important military ally to the U.S, and with a new President stepping into the White House, Biden and Duterte will have to establish a new diplomatic relationship between the two countries.

Duterte’s decision to cut ties with the US exposes the Philippines to many geopolitical threats and represents a strategic victory for Beijing in the region.

On Feb. 12, the government of the Philippines issued a notice to the United States embassy to terminate the Visiting Forces Agreement, or VFA. Under the agreeme

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.