The defence agreement between Washington and Manila is a key component of their decades-long alliance and it is also seen as a bulwark against China's growing clout in the South China Sea.
The Philippines has backtracked on its decision to end the key defence pact with the US, a move that is likely to antagonize an increasingly belligerent China.
The back-pedalling came after President Rodrigo Duterte changed his mind on distancing himself from the US as he tried to rebuild frayed ties with China over years of territorial rifts in the South China Sea.
The decision was announced Friday by Defence Secretary Delfin Lorenzana in a joint news conference with visiting US counterpart Lloyd Austin in the capital Manila.
“The president decided to recall or retract the termination letter for the VFA," Lorenzana told reporters after an hour-long meeting with Austin, referring to the Visiting Forces Agreement, adding: "We are back on track".
Duterte told the US last year that he planned to cancel the agreement after Washington DC cancelled the visa application of his close ally who led the controversial war on drugs campaign. The deal has been prolonged three times since then, most recently in June after months of negotiations between the two sides.
The 1998 VFA provides the legal framework for the US to hold joint military exercises and operations in the Philippines and is a key component of their decades-long alliance. It is also seen as a bulwark against China's growing clout in the region.
US Defence Secretary Austin said the decision would further bolster the two nations’ 70-year treaty alliance.
“Our countries face a range of challenges, from the climate crises to the pandemic and, as we do, a strong, resilient US-Philippine alliance will remain vital to the security, stability and prosperity of the Indo-Pacific,” Austin said.
“A fully restored VFA will help us achieve that goal together.”
China and US competition in Asia
Terminating the pact would have been a major blow to America’s oldest alliance in Asia. Washington squares with Beijing on a range of issues, including trade, human rights and China’s assertive policies in the South China Sea, which Beijing claims in its entirety.
Beijing claims almost all of the resource-rich sea, through which trillions of dollars in trade passes annually, with competing claims from Brunei, Malaysia, the Philippines, Taiwan and Vietnam.
The US on the other hand uses its military presence as a counterbalance to China, which has used force to assert claims to vast areas of the disputed South China Sea, including the construction of artificial islands equipped with airstrips and military installations.
Beijing warns Washington to stay away from what it describes as a purely Asian dispute.
But the US remains involved. Austin said that Beijing’s claim to the South China Sea “has no basis in international law” and “treads on the sovereignty of states in the region.”
He has reiterated American support to the region’s coastal states in upholding their rights under international law, and said the US is committed to its defence treaty obligations with Japan and the Philippines.
Rising hostility to China’s assertiveness
In March, Manila was angered after hundreds of Chinese boats were spotted inside the Philippines' Exclusive Economic Zone, sparking a war of words between the two countries.
Even though Duterte initially appeared reluctant to confront Beijing, he insisted Philippine sovereignty over the waters is not negotiable after facing growing domestic pressure to take a harder line.
"Gone are the days when the Philippines decides and acts in the shadows of great powers," Duterte said.
"We will assert what is rightfully ours and fight for what is rightfully due to the Filipino people."