Slow and Steady wins the Race: Philippines-Australia Relations in 2023

An Australian Prime Minister’s visit to the Philippines – after a gap of 20 years – could point the way a future relationship built on economics rather than just defence and security, writes Justin Baquisal.

On September 8, the Philippines and Australia elevated their bilateral ties from Comprehensive Partnership to a Strategic Partnership. Australian Prime Minister Albanese was keen to showcase his government’s policy of deep engagement with Southeast Asia, while Philippine President Ferdinand Marcos Jr. was gunning to strengthen security partnerships amid his new thrust of calculated and principled defiance of China.

However, for all the talk about defence, the new Strategic Partnership is heading in the right direction because of its wider geo-economic field of view, not its security component. Among the concrete deals cited in the Strategic Partnership declaration are several aimed at practical enmeshment between the Philippines and Australia, such as work and holiday visa arrangements to boost two-way tourism, technical exchanges, and the doubling of slots for Filipinos in the Australia Awards educational scholarship program.

These address one significant issue in Philippines-Australia relations: the historic lack of an economic force binding the two countries, which reciprocally rank low in each other’s trade portfolios. Despite growing by 17 percent in the past five years alone, the Philippines still consists of less than one percent of Australia’s goods export market. Australia’s imports from the Philippines have hovered at nearly the same levels since 2013 and overall bilateral trade with the Philippines is three to four times smaller than between Australia and other Southeast Asian states like Singapore, Vietnam, Malaysia, and Indonesia.

To be sure, Albanese affirmed the 2016 Arbitral Award in favour of the Philippines against China’s claims in the South China Sea. Days prior to his visit, the Philippines and Australia also agreed in principle to hold joint patrols in the South China Sea.  Indeed, security issues have long formed the nucleus of Philippines-Australia relations - a necessary but not sufficient foundation.

During the global War on Terror in the early 2000s, Australia poured in counterterrorism assistance to the Philippines, particularly in Mindanao, which also served Australia’s national security. Trainings on urban warfare, explosives, and intelligence, surveillance, and reconnaissance proved their value during the Marawi Siege in 2017 when terrorists attacked a city in southern Philippines. The 2012 Scarborough Shoal standoff between China and the Philippines catalysed the Philippine Senate to pass the Status of Forces agreement with Australia after two years of languishing in its halls. Australia and the Philippines made maritime security and law enforcement a priority area of cooperation. This was reflected in the 2015 Comprehensive Partnership signed by the Turnbull and Aquino governments.

One could view this bilateral relationship as rising to meet shared challenges, but it can also be characterised as primarily threat driven. For instance, 50 percent of Australia’s 2023-2024 Official Development Assistance to the Philippines goes to good governance and education - staples of countering violent extremism programmes - while only 15 percent is allocated for infrastructure.

As I argued elsewhere, the new Strategic Partnership reflects the donor-recipient dynamic that has historically characterised Australia-Philippines partnership. Surveys have shown that the Filipino public and security elites have high trust ratings of, and willingness to collaborate with, Australia. Bearing in mind the flow of resources in this partnership, this also reflects the pervasive sense of complacency and strategic mendicancy in Manila, which ought to shoulder its own defence needs. Australia’s resources are finite. Donor fatigue is a serious concern.

To its credit, Australia has had consistent approach to the Philippines these past three decades, regardless of whether the Australian Labor Party or the Liberal-National coalition is in power. From a Philippine perspective, Albanese’s team is building on rather than recasting Australia’s foreign policy.

But the fact that the Philippines is one of the largest recipients of Australia’s aid programs while also being one of the latter’s least important Southeast Asian economic partners should be cause for concern. There is real danger in the mindset among officials in Manila to overstate the Philippines’ value as “strategic real estate” that acts as a bulwark against Chinese maritime expansionism. The “China question” is an important policy issue, but it is not the only one.

In this context, the Strategic Partnership’s emphasis on people-to-people ties and economic enmeshment are taking the bilateral relationship in the right direction. It is in geo-economics that the partnership can grow, not just in defence, which has been on a good trajectory in previous years anyway. The Albanese government’s new Southeast Asia Economic Strategy to 2040 hits the right notes, including pushing for greater Australian involvement in infrastructure in the region, which the Philippines needs. And this is not because of some need to outbid China, but to solidify Australia’s gravitas to push its own foreign policy agenda in an age when hedging and transactionalism are becoming more commonplace.

The Philippines and Australia’s slow-and-steady approach with its historical roots in security issues has made for stable foreign relations. It gave the partnership concrete problems to solve. Unlike the US, Australia has no divisive baggage of colonial history in the Philippines. Additionally, Australia has largely avoided expressing its national interest in the Philippines as bundled together with unstated political ambitions, unlike China and the US. Consequently, the relationship is bound to grow because both countries value the partnership on its own terms.

But the bigger future questions turn on whether the process-oriented diplomacy of fraternisation, often sloganeered as “mateship and bayanihan” (sense of community), will deliver desired results. Presently, the strategic goals are less clear than is the desire for more bilateral cooperation, more patrols, more investments, and more exchanges. Where improvements in the scale and scope of cooperation took Filipino-Aussie relations far in the last three decades, the new geopolitical environment will put more premium on purpose and objectives. How will Australia respond to grey zone threats in the South China Sea? Will the Philippines play a critical role in Australia’s long-term security posture once the AUKUS submarines are delivered and Australia continues with far-shore force projection in regional waters? Does Australia intend to encourage its businesses to invest in friendly countries like the Philippines? Australia has the reciprocal access agreement, public support, and the economic clout. The road has been paved, but the question is: what is the destination?

Finally, there is the question of limits of cooperation. Australian Foreign Minister Penny Wong said that foreign policy “starts with who we are”. First, Australia will be increasingly forced to confront this question on critical issues like the notoriously violent Philippine drug war and the Marcos administration’s domestic revisionist agenda to whitewash the human rights violations of his father’s Martial Law Regime from 1972-1986. These issues inevitably lead back to the ethics of security assistance. Second, to what extent will Australia back the Philippines against China given the Albanese government’s commitment to the “change of tone” on China that doesn’t involve “chest-beating”? Third, what will Australia do if the Philippines fails to organically attract economic activity to its shores, owing to perennial ease-of-doing business factors? Is the idea of the partnership being defence-oriented all that bad?

The recently signed Strategic Partnership shows the payoffs of a slow-and-steady approach infused with the Albanese government’s policy of vigorous regional engagement. But will the wider aperture lead to a better geopolitical picture? That remains to be seen.

Justin Baquisal is a resident national security analyst at FACTS Asia, a Manila-based nonprofit providing defense and public policy analysis.