Rodrigo Duterte's shift on China threatens longstanding Philippines-US alliance
ANALYSIS
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As 2,000 armed service personnel from the US and Philippines join together for military exercises this week, they have been told it will be the last between the long-standing allies.
"I am about to cross the Rubicon between me and the US," President Rodrigo Duterte said recently.
Few doubt the challenge facing the Philippines as it balances relations with the US, its biggest military ally, and the growing might of China, the emerging superpower in its neighbourhood.
"I'm serving notice now to the Americans. I will maintain the military alliance, the RP-US pact which our countries signed in the early '50s. But I will establish new alliances for trade and commerce," Mr Duterte said.
"You are scheduled to hold war games, which China does not want. I will serve notice to you now that this will be the last military exercise, jointly, [between] Philippines, the US. Last one."
The war games have been crucial in building cooperation and strengthening the alliance, but that is all in jeopardy, while comments from the volatile Philippines president have seemed confusing.
First Mr Duterte announced US troops would be expelled from their base in Mindanao, where they have been helping combat insurgents.
Later he seemed to moderate his position, after his Defence Chief insisted the US relationship was "rock solid".
"I never said get out of the Philippines, for after all, we need them [the US] there in the China Sea. We don't have armaments," Mr Duterte said two weeks ago.
Any comfort the US drew from this was quickly dashed.
Mr Duterte called for an end to Philippine patrols in the South China Sea, beyond the 12-mile territorial limit, including an end to joint patrols with the US in disputed waters.
"I do not want my country to be involved in a hostile act," he said on September 13.
Troubled waters ahead for old allies?
US defence personnel see a rocky road ahead.
"Who lost the Philippines?", is one question reverberating on an internal defence forum, run by US and allied intelligence officials monitoring the rise of China, seen by the ABC.
Mr Duterte says he has two options — to talk or fight — when it comes to dealing with China's claims in the South China Sea.
Just a few months ago the US was buoyed by an International Court at The Hague verdict, which found China had no valid claim to the South China Sea and criticised its environmental destruction of reefs.
Philippine nationalists, who had been out to the contested islands were ecstatic.
"The Tribunal has justified our actions!" protester Joy Ban-eg exclaimed.
She and other members of patriotic group Kalayaan Atin Ito cheered the victory, which validated Philippines' claims to the sea, with its bountiful oil, gas and fish — as well as vital shipping lanes.
Mr Duterte's latest announcements have disappointed the group.
"These offshore reefs are part of our heritage," Ms Ban-eg said.
Duterte 'undermined US on China'
There were expectations The Hague decision meant the Philippines could call on allies like the US to help enforce the verdict, conducting "freedom of navigation" operations, and "constrain" China's ambitions through regional support and diplomatic pressure.
Former Philippines president Aquino was in lock-step with the US and its strategic "Pivot to Asia".
The US was given renewed access to five key military bases in a 2014 agreement called Enhanced Defence Co-operation Agreement (ECDA).
Since Mr Duterte swept to power, confidence in the agreement and the strength of the alliance has been shaken. More than one analyst has warned the pivot is now in tatters.
"Almost single-handedly, Duterte's undermined the US strategy against China," political analyst Richard Heydarian said.
"The Filipino leader has made it very difficult for Washington to mobilise regional diplomatic pressure on China based on the Hague verdict."
Mr Duterte has few options.
ASEAN, which represents south-east Asian nations, did not press Beijing to comply with the international court ruling at its recent summit, and its members are divided over supporting the Philippines on the South China Sea.
Mr Duterte can't rely on the US to back it militarily over the South China Sea, says security expert Matthew White, an advisor to business and government, at Pacific Strategies and Assessment, in Manila.
"The defence treaty is strictly defensive," he said.
"It doesn't apply if the Philippines goes on the offensive, and it doesn't apply to disputed territory if it is already ceded — like Scarborough Shoal."
Mr Duterte is making overtures to China and Russia. He wants discussions on buying arms, has sought bilateral meetings, and is negotiating infrastructure investments.
Chinese Vice Foreign Minister Liu Zhenmin has welcomed the change of direction and said recently that China-Philippine relations are "at a new turning point".
Few doubt the challenge for the Philippines as it balances relations with the US and China.
But there are limits to embrace. Research from 2015 suggested Mr Duterte heads the world's most pro-US nation and he faces strong domestic pressure to maintain the alliance.
"Especially since they are very antagonistic towards China, which is widely viewed as the number one security threat to the Philippines."
Mr Duterte may not go the whole way and completely sever relations with the US, Mr Heydarian said.
"If we see him formally scuttling the EDCA, that's the moment we can say he is really moving away from the US," he said.
"But there is no doubt he has probably strengthened China's hand in the region in the medium term."
Philippines loyalty 'taken for granted'
While most analysts don't see much method in Mr Duterte's "madness", this is not to say he is acting without reason. He may be using his pro-China moves as leverage.
Mr Heydarian said US assistance to the Philippines pales in comparison to billions of dollars given to non-traditional, non-democratic countries like Egypt, Turkey and Pakistan. In 2015, they provided $A79 million.
While appearing quixotic, Mr Duterte has shown with his war on drugs that his statements can't be ignored.
Matthew White is advising clients of a higher business risk as the Peso drops to its lowest value since 2009.
"There has not been any capital flight. But before there is big investments, the business community and allies are going to want to see predictability because predictability lowers risk," he said.
After the war games are over, Mr Duterte is scheduled for talks in Beijing later this month.
Analysts will be watching intently for the outcome, and assessing how far their valuable ally is "lost' to US interests.
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