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Philippine Foreign Policy toward China: Three Actors Working in Parallel

Published onFeb 21, 2022
Philippine Foreign Policy toward China: Three Actors Working in Parallel
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Introduction1

On March 20, 2021, the Philippine government announced that it had found around 220 Chinese vessels in lines at Whitsun Reef (called Julian Felipe Reef in the Philippines) within the Philippine Exclusive Economic Zone (EEZ).2 Since then, Defence Secretary Delfin Lorenzana and Foreign Secretary Teodoro Locsin have repeatedly demanded that China evacuate immediately. The Philippine Coast Guard found the vessels that the Chinese militia allegedly operated on March 7th and reported the issue to the National Task Force for the West Philippine Sea, an interagency body that coordinates Philippine policy in the West Philippine Sea. While the Chinese vessels stayed at the reef, the Department of Foreign Affairs (DFA) filed daily protests against China, summoned the Chinese Ambassador to the Philippines on April 12th, and released a statement to explain additional diplomatic notes in protest at the presence of the Chinese vessels on April 23.3 Meanwhile, President Duterte maintained his friendly tone and even asserted that the Arbitration Court’s decision was a “piece of paper,” although he did not prevent the Department of National Defense (DND) and the DFA from taking action.4

How should people understand the complicated messages from the Philippine government? Assuming that President Duterte was seeking an “appeasement policy” toward China, why might his cabinet members denounce Chinese behavior, send diplomatic protests and disclose the result of patrol missions, further fueling the fire of anti-China sentiments in Philippine society?5

In this study, I argue that the three actors, meaning the presidency, the DFA and the DND, have sought different policy goals for years.6 Each has developed its capacities to make and implement its own policies through its own professionals. A comprehensive picture of Philippine diplomacy emerges only when scrutinizing the goals of the respective actors and their implications for Philippine–China relations. Despite the decisive and constitutionally guaranteed power of the presidency, we should not underestimate the impact of departmental policy goals on Philippine foreign policy. Presidents do not always dominate Philippine foreign policy-making in practice, because they have limited time to spend on the actual political and diplomatic process; and they are often distracted by domestic concerns such as macroeconomic stability, anti-corruption campaigns or drug abuse.

Figure 1. The Three Actors’ Changing Philippine Foreign Policy Orientations

Source: the author

Figure 1 summarizes the three actors’ major concerns in the 21st century, showing how their differing policy goals have changed over time. Amongst the three actors, the presidency has changed policy goals most frequently. The DFA changed its policy direction toward China in 2011, when a newly appointed Defence Secretary shifted from the ASEAN-centered approach to the legal approach. Coincidentally, a peace agreement was concluded between the Philippine government and the Moro Islamic Liberation Front, and an AFP Modernization Act was passed, leading to the transformation of the internal security force into an external defence organisation with a functional Air Force and Navy.

The following sections trace the development of these policy goals, and analyse their consequences for Philippine–China relations. The first section reviews the Gloria Macapagal Arroyo administration, during which the presidency’s policy goals changed, but the policy goals of the DFA and DND did not alter. The second section covers the period of President Benigno Aquino, who managed a large shift in foreign policy toward China in coordination with the departments. The third section traces the evolution of Philippine diplomacy under President Duterte, who personally became closer to China but left departmental policies relatively untouched.

1. The Arroyo Administration: Getting Closer to China with Some Precaution

The President-led “Golden Age” with China and the DFA’s China Policy within the ASEAN Mechanism

President Arroyo remains known for her close relations with China, during a period that both governments once called the “Golden Age,” especially in the latter part of her 10-year administration.7 She became closer to China, especially after 2004, when the Philippine government withdrew its troops from Iraq because of the abduction of a Filipino driver. The abducted driver was one of the six million Filipino workers living in the Middle East — part of the 10 percent of the Philippine population working abroad, whose remittances equal 10 percent of the GDP of the Philippines. The extent of political concern about the welfare of such Overseas Filipino Workers was made clear when President Arroyo responded by withdrawing the Filipino troops from Iraq.

President Arroyo visited China in September 2004 and received President Hu Jintao in Manila in 2005. According to the Philippine embassy’s website, President Arroyo visited China 10 times in her 10-year tenure. The number is striking when compared with President Aquino’s two visits in his six-year tenure.8 The media reported a series of big-ticket items that the two governments agreed on at the summit meetings, such as a railway project in Northern Luzon (USD 400 million), a railway project in Southern Luzon (USD 900 million) and a national broadband project (USD 330 million).

Meanwhile, the Philippine government continued dialogue with China over the South China Sea after having discovered a building in Scarborough Shoal (well within the Philippine’s EEZ) in 1995.9 In internal discussions at the National Security Council at the time of the discovery, President Fidel Ramos had opted for the moderate proposal of his Foreign Secretary, Domingo Siazon, although he had listened to the more decisive proposal made by his security advisor and Defence Secretary. Siazon, a career diplomat, had been appointed as Foreign Secretary just before the Scarborough incident and had stayed at the post in the succeeding Estrada administration until President Estrada’s resignation in 2001. Another career diplomat, Rodlfo Severino, had served as the DFA Undersecretary and the ASEAN senior official of the Philippines from 1992 to 1997, and had served as the ASEAN secretary general from 1998 to 2002, when ASEAN and China signed a Declaration on the Conduct of Parties in the South China Sea. Throughout this period, Siazon and Severino worked to operate Philippine diplomacy toward China within the ASEAN mechanism.

Enhanced Relations of the Armed Forces of the Philippines with the U.S. Military and the Independence of the Philippine Coast Guard

While President Arroyo complicated Philippine ties with the U.S., she did not intend to cut those ties altogether. The Arroyo administration worked with the U.S. military, which carried out “Operation Enduring Freedom – Philippines” from 2001 to 2015, mainly in the Southern Philippines.10 The Philippine government shared common interests with the U.S. in conducting the global war on terror and accommodated 500 to 600 American soldiers on average during the operation.

The operation left a legacy that influenced Philippine policy toward China. The Philippine military targeted the Abu Sayyaf Group, maintaining a stronghold on Basilan Island in the Sulu Archipelago, which is prone to various illicit trades across its maritime borders with Malaysia and Indonesia. In cooperation with the U.S. and Australian Navies, the Philippine Navy established Coast Watch South to enhance maritime domain awareness.11 To face China, the Philippine government focused on building the capacity of its maritime domain awareness, as discussed below.

The Arroyo administration also implemented Republic Act 9993 to detach the Philippine Coast Guard (PCG) from the Navy — thereby allowing the Philippine Coast Guard to receive vessels from Japan. A maritime accident prompted the administration to carry out the reform, which the Navy had opposed for decades.12 Empowered with new vessels, the PCG played a bigger role in the succeeding administrations.

The DFA’s Rule of Law Approach

In 2009, under the Arroyo administration, the DFA led the implementation of an Archipelagic Baseline Act — in line with a sequence of efforts over a long period by DFA officials to develop legislation promoting the rule of law in maritime affairs. In 1981, the Philippine government had established a Cabinet Committee on the Treaty on the Law of the Sea to prepare to implement the Treaty.13 The Philippine government had signed the United Nations Convention on the Law of the Sea (UNCLOS) in 1982, with effect from 1984. Since that time, the Philippine government had reorganized the Committee several times, but always with the DFA maintaining its role of providing the Committee’s secretariat.14

The archipelagic baseline clarifies the continental shelf of the littoral states. The Arroyo administration began preparing for the Bill in 2007, but it faced Chinese opposition and spent several years finalizing the Bill.15 On the domestic front, a debate over the Spratly Islands occurred. Some proposed including these Islands inside the Philippine baseline, while the DFA supported a version of the Bill which excluded the Islands from the baseline and subjected them to a separate ‘regime of islands’ in conformity with UNCLOS. The administration as a whole supported the DFA’s version of the Bill and it passed into law in this form in 2009.16 Those who opposed the Act filed a case in the Supreme Court; but the Supreme Court upheld the Act. Justice Antonio Carpio, penning the decision, explained that the Philippine government should have “clean hands” when faced with China’s claim over the Spratly Islands.17

Consequences

 In short, while President Arroyo grew closer to China, the DFA continued to rely on ASEAN-led mechanisms to manage the issue of the South China Sea, and was guided by international law rather than by Chinese pressure when it excluded the Spratly Islands from the Archipelagic Baseline Act — realising, like Justice Carpio, that the Philippines needed to prepare for a day when it might require international legal support in a conflict with China over the South China Sea. Meanwhile, the DND worked closely with the U.S., although it focused more on domestic insurgency in the Southern Philippines.

2 The Aquino Administration: Facing China with the Rule of Law and Military Modernization

Facing China

The Aquino administration wanted to eradicate the previous Arroyo administration’s corruption, and never pushed through Arroyo’s big-ticket projects funded by the Chinese government or Chinese businesses — which had involved disastrous scandals. Aquino also stood firmly against China’s provocative actions in the South China Sea, sacrificing cozy economic relations with China.

Why did the Philippines dare to endanger its relations with China, while many other countries were accommodating China’s rising power due to the enormous economic opportunities? First, the Aquino administration believed in the logic of a market economy, where entrepreneurs rather than rent seekers but play a leading role. The Aquino administration therefore prioritized macroeconomic stability and efforts to ease the business environment in general, and it further focused on social policy instead of economic policy.18 Tellingly, the Aquino administration’s policy succeeded in attracting larger amounts of Foreign Direct Investment (FDI) from China than the Arroyo administration did;19 as Camba argues, private businesses in China appreciated macroeconomic stability under the Aquino administration. Moreover, the Aquino administration was not dogmatic in its approach to China; the President decided to join the Asia Infrastructure Investment Bank (AIIB), on the basis that it was a multilateral and market-friendly initiative.

Second, the diversified economic structure of the Philippines made it easier for Aquino’s presidency to conduct its economic policy toward China. In 2019, the remittances from Overseas Filipino Workers were four times larger than total Philippine FDI, and Overseas Development Assistance was also three times larger than total FDI. Although the most popular destination for overseas Filipino workers has been the Middle East, the largest source of remittances is the U.S. Even in terms of FDI, the U.S. and Japan have remained the biggest investors for years. Furthermore, Japan and the ADB have been the biggest sources of ODA for years. True, China is the Philippines’ largest trading partner, but China exports to the Philippines much more than it imports from the Philippines. Moreover, the Chinese market is one of the export markets that the Philippines has cultivated,20 making it easier for the Philippines to enjoy the economic opportunity created by growing trade opportunity with the rest of the world. In other words, the economic structure of the Philippines does not necessarily constrain the economic policy of the government, because it provides multiple opportunities for prosperity and growth.

Build-up of the Coast Guard Capability and Military Modernization

In September 2011, the Aquino administration reorganized the Commission on Maritime and Ocean Affairs (which followed the Cabinet Committee established in 1981), and transformed Coast Watch South into a new National Coast Watch System (NCWS), composed of the National Coast Watch Council and the National Coast Watch Center.21 In terms of maritime domain awareness, the system differs from the previous Coast Watch South in two ways. First, it covers the entire country, whereas the previous system focused only on the Southern Philippines. Second, its headquarters are located not in the Navy but the Coast Guard. Thanks to the reform carried out under the Arroyo administration, the Philippine Coast Guard has steadily developed its capacity and has come to play a leading role in maritime domain awareness.

The Aquino administration enhanced the military capability of the Philippines. In 2012, it revised the AFP Modernization Act to counter not only traditional internal threats, but also external threats. To address such external threats through improved technology, the Armed Forces of the Philippines (AFP) allocated more budget resources to the Air Force and Navy; and the Philippine government sought capacity-building support and defense procurements from the U.S., Australia, South Korea and Japan. The Philippine Senate ratified the Philippines–Australia Status of Visiting Forces Agreement in 2012, providing a legal basis for the Australian military forces to work with Philippine military forces.22 South Korea played an important role in procurement for the Philippine Air Force when it made a deal to export 12 FA-50 fighter jets in 2013.23 Because of this deal, the Philippine Air Force was able to fill the vacuum of supersonic fighter jets that had been created by the retirement in 2005 of the jets that they used previously. The Aquino administration further entered into an Enhanced Defense Cooperation Agreement (EDCA) with the U.S. to improve defense cooperation in various ways in 2014.

The Emerging Rule of Law Approach within the DFA

The Aquino administration shifted its policy toward China from a passive stance to a decisive stance after appointing Albert Del Rosario as the Foreign Secretary in 2011. When Del Rosario assumed office, the DFA faced a series of provocative actions on the part of the Chinese in the South China Sea. The DFA was informed that China often harassed Filipino fishery vessels in the South China Sea and that Chinese ships had harassed a ship conducting a survey of natural resources within the Philippine EEZ. The DFA sent a series of notes verbales — in vain.24

Faced with China’s disturbing actions and intransigence, Secretary Del Rosario expressed his view in a signed article entitled “A Rule-based Regime in the South China Sea” on June 7, 2011.25 He argued that: “the rule of law is the bedrock of peace, order and fairness in modern societies. The rise of a rule-based international system has been the great equalizer in global affairs.” He did not explicitly accuse China, but clearly stated that the Philippines engaged with other parties in the South China Sea based on international law. For instance, he stated, “the Philippines has unequivocal sovereign rights over Recto (Reed) Bank [in the South China Sea]” because the latter is well within the Philippine EEZ, and “it is roughly 595 nautical miles from the nearest coast of China.”

Del Rosario took this unprecedented approach because of China’s adamant position. In April 2012, Chinese and Philippine vessels had a standoff in Scarborough Shoal, well within the Philippine EEZ. The Philippine government sought U.S. support, and the U.S. actually attempted (but failed) to mediate a resolution of the conflict. The Philippines also attempted to take action through a ministerial meeting of ASEAN chaired by Cambodia, but failed (for the first time in the history of ASEAN) to achieve a unanimous communique.

Having exhausted all other options, Del Rosario filed the case at the Permanent Court of Arbitration.26 In preparation, Del Rosario established a West Philippine Sea Task Force staffed with the officers from the Maritime and Ocean Affairs Office, the West Philippine Center, the Office of Asia and Pacific Affairs and the Office of the Foreign Secretary. Henry Bensurto (who had once worked with Del Rosario when he was the Philippine ambassador to the U.S., and who was one of the few lawyers with expertise on maritime law in the DFA) acted as a close aide. As Carpio had anticipated, the Philippine government finally faced China in an international legal arena.

Consequences

The decision of the Aquino administration to debate with the Chinese the application of the rule of law in the South China Sea reflected President Aquino’s skepticism about China. Although the administration at first attempted to solve the issue through bilateral diplomatic channels (via the note verbale), and through assistance from allied partners such as the U.S. as well as through ASEAN mechanisms, it was ultimately willing to take unprecedented legal action, for which it was well prepared by officials from the Maritime and Ocean Affairs Office within the DFA, supported by the DND and PCG which continuously developed their capacity with various types of help from the U.S., Australia and Japan. But the successful international legal action of the Philippines failed to stop Chinese harassments, in contrast with Vietnam which, in the parallel case of the Paracel Islands, rejected the legal approach in favour of a more confrontational stance.27 This was the context within which the newly elected President Rodrigo Duterte would take a new approach toward China.

3 The Duterte Administration: “Appeasement” and Continuous Capacity Building

President’s “appeasement” toward China and Coast Guard “Diplomacy”

Clearly, under President Duterte the Philippines have become closer to China. Before the COVID-19 pandemic, President Duterte visited China five times.28 In particular, during his first visit to China in 2016, he signed an economic cooperation agreement totaling USD 24 billion.29

Tellingly, Duterte appointed Jose Santiago Sta. Romana as his ambassador to China before appointing his ambassador to the U.S., which is the Philippines’ sole allied partner. Sta. Romana lived in China for decades and worked as the Beijing bureau chief of ABC News. After returning from China in 2010, his expertise on China was well acknowledged and he served as the president of the Philippine Association of Chinese Studies. In his articles and interviews, he argued that the Philippines should learn from China under Deng Xiaoping, which shelved its territorial claims and focused on economic development with neighboring countries. He also explained that the Duterte administration’s independent foreign policy should be seen as an initiative to balance Philippine foreign policy, which had previously tended to highlight its relations with the U.S.30

However, although President Duterte has rarely mentioned the international arbitration award, capacity building in the field of the maritime domain awareness has continued. The NCWS has continued to receive U.S support. Raytheon, a leading company in the U.S. defence industry, worked on the NCWS’s maritime domain awareness project under a USD 25 million contract from 2013 to 2017, a period straddling the Aquino and Duterte administrations. Raytheon also designed the National Coast Watch Center’s headquarter in Manila, as well as its regional offices in Cebu and Palawan facing the South China Sea.31 Meanwhile, the West Philippine Sea Task Force, established under the Aquino administration, has carried out inter-agency coordination between the presidential advisor, the DND, the DFA, the PCG, and other agencies.

While the DFA avoided bold actions at the beginning of the Duterte administration, the PCG have executed so-called coast guard diplomacy, according to Jay Tarriela of the PCG.32 Tarriela pointed out that both the Aquino and Duterte administrations built up the PCG’s capacity, although they did not share the same purpose in doing so. While the Aquino administration built up the Coast Guard’s capacity as a tangible force on the sea to face China’s pressure, the Duterte administration has built up the the Coast Guard’s non-military capacity to avoid unnecessarily stimulating China. Tarriela highlights the international dimension of the capacity building and refers to it as coast guard diplomacy. The Duterte administration has also continuously joined multilateral exercises that include a U.S. presence. In 2017, the Philippines made an agreement with Indonesia for joint patrol in the Sulawesi Sea, and then carried out a joint patrol in the Sulu Sea with Indonesia and Malaysia.33 The PCG has remained in the front line of this multilateral and minilateral maritime cooperation, despite the President often claiming that he would suspend or decrease exercises involving the U.S.

 The Duterte administration has also steadily enhanced the cooperation with Japan on maritime domain awareness which the Aquino administration initiated.34 The Philippines and Japan have agreed to build ten 44-meter vessels and two 90-meter vessels for the PCG funded by Japanese ODA. Aside from these procurements, the two governments have agreed to develop training for PGC officers and have started a degree program for Coast Guard officers in cooperation with JICA, the Coast Guard Academy of Japan and the National Graduate Institute for Policy Studies (GRIPS).

In short, despite the President’s anti-American rhetoric, the Duterte administration has not departed from its traditional alliances, but has instead continued the programs started by the Aquino administration, and has steadily expanded cooperation with Australia and Japan.

Continuous Modernization of the Armed Forces of the Philippines

The AFP gained new facilities throughout the country in 2020, the first year of COVID-19, and it has renewed its efforts to counter China’s assertive actions — not least because of its concerns about China’s possible influence on infrastructure development projects, including two port development projects.35 In January 2019, Hanjing Heavy Industry’s joint venture with a Philippine company went into bankruptcy and sought expressions of interest to purchase its facility in Subic Bay.36 The shipyard was the largest shipbuilding facility in the Philippines and employed around 30,000 workers at its peak. This attracted the attention of security experts because of the deep port’s location in Subic Bay facing the South China Sea, where the U.S. Navy had stationed for decades before its departure in 1991. In early January 2020, when some commentators were worrying about a possible sale to the Chinese, Austal (an Australian shipbuilding company) announced its intention to acquire the facility with U.S. financial support. Interestingly, the AFP simultaneously announced that it would use a part of the facility for its own ships.

In Fuga Island (the port of which faces the Bashi Channel between the Philippines and Taiwan), a development plan for a smart city with Chinese capital similarly attracted the interest of the AFP. When the AFP announced its concern about Chinese involvement in the plan, the local authority managing the Fuga Island’s economic zone denied permission for the development. President Duterte subsequently declared that the area would be developed as a facility for the Philippine Navy.37

In addition to these cases resulting in the build-up of Philippine naval facilities, the AFP has further enhanced its capacity to project naval and air-power in the South China Sea by advancing the development of Pagasa Island (one of the Spratly Islands). The Philippine government has occupied the island since the 1970s, but has now improved the port facility in preparation for development of a new runway on the island despite Chinese opposition.38

These three cases show how, even under the Aquino presidency, the DND and the AFP have advanced their tangible positions against possible Chinese influence.

The DFA at the Mercy of Colorful Presidential Remarks

President Duterte has, however, made a series of colorful remarks shaking the Philippine–U.S. alliance. The rhetorical high point was reached in January 2020, when the US cancelled the visa of Senator Ronald Dela Rosa (who had led the anti-drug war as Chief of the Philippine National Police) and President Duterte declared that he intended to suspend the Visiting Forces Agreement.39 However, before the declaration became effective, President Duterte and President Trump had a telephone conference in April; and, in June, the DFA suspended the president’s declaration for six months — ostensibly because of China’s assertive actions in the South China Sea. Interestingly, despite this official explanation being given by the DFA, Senator Dela Rosa revealed publicly that he had received a call from the U.S. embassy in Manila and had obtained approval of his visa to enter the U.S. Given the event’s chronological development, it is clear that the alliance had been jeopardised by the US refusal to renew the visa of one of President Duterte’s close aides, and that the problem was fixed only after the two presidents agreed to solve the senator’s visa problem.

Despite the turmoil, the DFA did not entirely relinquish its efforts to enforce international law in the South China Sea. In September 2020, President Duterte declared:

“We must remain mindful of our obligations and commitment to the Charter of the United Nations and as amplified by the 1982 Manila Declaration on the Peaceful Settlement of International Disputes.

“The Philippines affirms that commitment in the South China Sea in accordance with UNCLOS and the 2016 Arbitral Award.

“The Award is now part of international law, beyond compromise and beyond the reach of passing governments to dilute, diminish or abandon.

“We firmly reject attempts to undermine it.

“We welcome the increasing number of states that have come in support of the award and what it stands for - the triumph of reason over rashness, of law over disorder, of amity over ambition. This - as it should - is the majesty of the law”.40

This official Presidential statement to the UN is striking when compared with China’s neglect of the Court’s judgement. Although the Philippine government explained that the statement did not change foreign policy toward China,41 and despite the fact that President Duterte unofficially described the arbitration award as a “piece of paper” in May 2021, it is notable that the Philippine government did not publish any official document to support this remark on the part of the president.

It is also notable that the DFA succeeded in preserving the alliance with the U.S. When U.S. Secretary of State, Lloyd Austin, visited Manila in July 2021, the Philippine government officially restored the VFA and the two countries issued a ‘joint vision’ in November 2021.42

Consequences

To summarise, under the Duterte administration, the presidency has become closer to China to induce economic benefits; but this has not been the only line of development. The DND has simultaneously advanced military modernization through procurements and capacity-building supported by other countries, including the U.S. Thanks to these military modernization and capacity-building efforts, the Philippine government was able to deploy naval vessels and jet fighters when it faced more than 200 Chinese vessels in the South China Sea in 2021. Even though it was difficult to determine the Chinese vessels’ intentions, the Philippine government was able to project its power in this way, and was able to ascertain the presence of the Chinese vessels thanks to its enhanced maritime domain awareness. The Chinese vessels finally left the reef. The AFP has also established new facilities in several strategic places, including in the Spratly Islands. Meanwhile, the DFA — though failing spectacularly to enforce the judgment obtained through the legal case against China in the South China Sea, has nevertheless somehow retained the moral force of its legal approach and has managed also to maintain the Philippine–U.S. alliance despite the president’s anti-American rhetoric.

Conclusion

Thanks to China’s rising power, each actor in the Philippines has faced China, seeking to promote its own policy goal. It is difficult to identify a single Philippine policy toward China, because the three principal actors do not always synchronize their actions. Hence, Philippine foreign policy across time can be understood only if the policy goals at any given time of the presidency, the DFA and the DND, and their relationships with other actors are clarified.

Because Presidents Arroyo, Aquino and Duterte have sought different foreign policy approaches toward China, the Philippines has in turn. become closer to China, then kept a distance, and then become closer again. The DFA has also changed its approach over time — first emphasising bi-lateral channels and diplomacy through ASEAN-led mechanisms, but then gradually shifting to a legal approach, coinciding with the retirement of the veteran diplomats who were responsible for the former approaches in the 2010s. Throughout the period of the three presidencies, the DND has continuously worked for military modernization through which it has aimed to transform the military from an organisation for ensuring internal security to the an organisation for conducting external defence. The DND has not always identified China as the Philippines’ major threat, but it has faced China in the South China Sea, where China has continued its assertive actions.

The three actors’ policies have not been synchronized. Some have changed; others have remained in place, regardless of changes of administration. The DND’s efforts to modernise the military and to build the capacity of the Coast Guard capacity were policy goals shared by the Aquino and Duterte administrations. The DFA’s international legal approach, which the Aquino administration spearheaded, became possible because of the Arroyo administration’s preparation in passing the Archipelagic Baseline Act into law, and left the international arbitration award as a legacy for the succeeding administration. Given the elections this year (2022), there may well be a new mix of changes and continuities of Philippine foreign policy in the near future.

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