The U.S. announced on Tuesday an investment of $500 million to finance the Philippines’ ongoing defense upgrade program, supporting in part efforts to counter China’s maritime aggression in the South China Sea.
The investment was announced at the two-plus-two talks held on Tuesday between the defense and foreign ministers of the Philippines and the U.S. The meeting is the fourth of its kind, but the first to be held in the Philippines, and comes at an opportune time for the country’s diplomacy, after similar talks were held with Japan earlier this month.
“We’re working with the U.S. Congress to allocate $500 million in foreign military financing into the Philippines,” said U.S. Defense Secretary Lloyd Austin. “This level of funding is unprecedented.”
Touted by Austin as a “once in a generation” investment, the fund will be used to assist the Philippine Armed Forces modernization program, which gained ground in recent months as the administration of President Ferdinand Marcos Jr. shifted its focus to external defense.
The Philippines’ geopolitical partners have used this modernization program to broaden their support for Manila, such as in December when Japan handed over a radar system aimed at “scoping out” threats on the horizon.
This investment comes as tensions between Manila and Beijing in the South China Sea continue to flare. They reached a peak after Chinese Coast Guard personnel, armed with spears and knives, on June 17 boarded a Philippine boat near the waters of Second Thomas Shoal and damaged equipment on the boat. A Filipino serviceman also lost a thumb in the clash. Manila called the incident “piracy” and demanded Beijing pay $1 million in reparations for property damage.
The two countries agreed to defuse tensions earlier this month, agreeing on a provisional arrangement for Philippine resupply missions to its outposts in the disputed waters. But even after the foreign ministers of the two countries held their first meeting in two years in Laos on Friday, a Chinese foreign ministry spokesperson expressed dissatisfaction with a Philippine resupply mission conducted to Second Thomas Shoal on Saturday.
Separately, the two-plus-two talks also yielded additional support, in the form of more than $128 million in investments, regarding shared military installation sites around the Philippines, as stated in their Enhanced Defense Cooperation Agreement signed in 2014. The EDCA investments will be directed towards humanitarian assistance and disaster response, according to Philippine defense chief Gilberto Teodoro, as well as “venues for joint cooperation and interoperability” between the two treaty allies.
