Us’ Transactional Approach And Philippines’ Strategic Direction In New Heights Of Indo-pacific’s Security Sphere – Analysis

In March 27-28, 2025, US Secretary of Defense Pete Hegseth visited the Philippines. The dialogue reaffirmed the strength of the US-Philippines alliance, emphasizing the importance of the Mutual Defense Treaty (MDT), Visiting Forces Agreement (VFA), and Enhanced Defense Cooperation Agreement (EDCA) in maintaining regional stability.

The two nations committed to strengthening military cooperation, enhancing defense capabilities, and increasing deterrence measures in the Indo-Pacific. The visit also reinforces the long-standing US-Philippines alliance. Both sides highlighted resolutions on modern security challenges, particularly in the South China Sea.

Key initiatives are as follows:

• Deploying advanced US military systems (e.g., NMESIS and unmanned vessels) to improve joint operational readiness and maritime security.

· As part of Exercise BALIKATAN 2025 and other service-to-service activities will improve interoperability and strengthen deterrence by providing coverage of strategic sea lanes from coastal positions.

· Training and testing on NMESIS and unmanned surface vessels as part of realistic exercises in the Philippines will increase the interoperability and operational readiness of US and Philippine forces to leverage cutting-edge military capabilities in Indo-Pacific operational environments.

• Expanding special operations training in the Batanes Islands to enhance combined military capabilities.

· US Special Operations Forces and Philippine Marines train together on complex landing scenarios to enhance interoperability between US forces and the Armed Forces of the Philippines and improve combined capability to conduct high-end operations in the Indo-Pacific region.

• Strengthening defense industry ties through a new cooperation vision, potentially including co-production of unmanned systems.

· United States and the Philippines are deepening their alliance by enhancing cooperation between their defense industries. This initiative aims to foster stronger military and industrial partnerships, reinforce supply chain stability, improve operational readiness, and contribute to economic growth in both nations.

· The defense secretaries have unveiled a joint vision statement outlining key areas for immediate collaboration, including the potential co-production of unmanned systems and expanded logistics support. The statement also details efforts to reduce trade and regulatory barriers, promote technological collaboration, and identify specific joint projects. Both nations see this framework as a foundation for strengthening regional security, bolstering economic stability, and supporting prosperity across the Indo-Pacific region.

• Launching a cybersecurity collaboration to enhance network security and intelligence-sharing.

· US and Philippines will work together to strengthen cybersecurity and minimize vulnerabilities within the alliance. This initiative focuses on three key objectives: creating a secure defense network, building a skilled cybersecurity workforce, and enhancing operational collaboration. By improving cyber capabilities and infrastructure, both nations aim to facilitate more effective intelligence and information sharing, boost operational effectiveness, and enable more sophisticated joint military coordination.

These efforts aim to fortify regional security, boost economic and military ties, and ensure peace through strength and focusing on security interests in the Indo-Pacific.

Strategic Direction on US-Philippines Defense Cooperation

1. The US Prioritizing the Indo-Pacific Region

During US Secretary of Defense Pete Hegseth's recent speech emphasized that the Trump administration is shifting its primary focus toward the Indo-Pacific region. This strategic realignment is aimed at countering China's growing assertiveness, particularly regarding its territorial expansion and influence over US allies. As Secretary Hegseth arrived in Manila, there is hope that this commitment will remain steadfast.

This policy shift also explains President Trump's determination to bring an immediate resolution to the Russia-Ukraine conflict. The rationale behind this is clear: by reducing its military engagement in Europe, the United States can lessen its burden in European defense and compel its European allies to take on greater responsibility for their own security. This approach allows the US military to reallocate resources and shift its strategic focus toward the Indo-Pacific, where China, specifically the Chinese Communist Party (CCP) has been identified as the most significant threat to US national security.

With China's growing influence in the South China Sea and its territorial disputes with the Philippines, Philippines stands to benefit from this shift, as the US will likely expand its security presence in the region. However, this realignment could also intensify tensions with Beijing, making it crucial for the Philippines to navigate its diplomatic and military relationships carefully.

2. Anticipating Pressure to Increase Philippine Defense Spending

As part of the US Indo-Pacific strategy, allied nations are expected to take a greater role in their own defense. Recently, Australia approved its 2025 defense budget, allocating 2.1% of its Gross Domestic Product (GDP) to defense spending. However, even this increase falls short of President Trump's expectations, as he has pushed for Australia to allocate at least 3% of its GDP to military expenditures.

This development suggests that a similar expectation may be placed on the Philippines. It is highly likely that Secretary Hegseth will Philippines to significantly increase the Philippines' defense budget, potentially raising it to 2% of GDP.

Currently, the Philippines allocates around 1.1-1.2% of its GDP toward military spending, an amount that falls below US expectations. If the Philippine government agrees to raise its budget to 2% of GDP, it would double the available funds for the Armed Forces of the Philippines (AFP), increasing the annual defense budget to an estimated $10.5 billion by 2026. This additional funding would enable major advancements in military procurement and operational sustainment.

However, one of the primary concerns regarding this potential budget increase is the Philippine government's financial constraints. If Philippines already struggles to shift Php 45B from unprogrammed to programmed funding, securing an additional Php 500 billionannually for defense spending would be an enormous challenge. The government must carefully evaluate its financial capacity and explore alternative funding sources to meet these increased defense obligations.

3. US Pressure on the Philippines to Procure American Military Equipment

President Trump has repeatedly demonstrated a transactional and business-oriented approach to foreign policy. Given this, it is highly probable that Secretary Hegseth will encourage the Philippines to prioritize purchasing US military equipment over foreign alternatives.

Sales (FMS) and Foreign Military Financing (FMF) to US allies. While this would mean fewer restrictions and expedited deliveries, it also suggests that the US government may exert significant pressure on allied nations to support American defense contractors, thereby strengthening the US military-industrial complex. For example, the US could strongly advocate for the Philippine Air Force (PAF) to select the F-16 Viper for its Multi-Role Fighter (MRF) program. If the PAF opts for an alternative aircraft, such as Sweden's JAS-39 Gripen, the US might leverage its control over key components to block or delay the purchase, as the Gripen relies on American-made parts. While greater access to US military technology and financing could benefit the AFP, it may also limit the Philippines' flexibility in choosing the most cost-effective or strategically suitable military systems.

4. Potential US Demands for "Compensation" in Exchange for Military Presence

One of the more concerning possibilities is that the United States may request some form of compensation for maintaining its military presence near Philippine territory. While this would not necessarily involve direct financial payment, President Trump's transactional mindset raises concerns about potential demands in return for US security guarantees.

Historically, the Philippines has relied heavily on US military support, given its limited defense budget and governmental preference for external security assistance. If US was to seek compensation, it could take various forms, including:

• Expanded access to military bases beyond what is currently permitted under the Enhanced Defense Cooperation Agreement (EDCA).

• Increased Philippine support for US foreign policy goals, potentially straining relations with China.

• Stronger military commitments, such as participating in joint maritime patrols or regional security initiatives with other US allies.

However, the Philippines' strategic geographical location remains its strongest bargaining tool. Given its position in the Indo-Pacific, the US cannot afford to neglect its alliance with Philippines. If managed carefully, the Philippines could leverage this strategic advantage to negotiate more favorable security agreements without overcommitting to US demands.

5. Strengthening the "Mutual Defense" Aspect of the US-Philippines Alliance

As the US reaffirms its commitment to the Mutual Defense Treaty (MDT), it is likely that US will urge Philippines to take a more proactive role in regional security. Rather than continuing to rely solely on American protection, the Philippines may be encouraged to contribute more actively to collective defense efforts in the Indo-Pacific. This could involve:

• Increased Philippine participation in regional security exercises, such as joint drills with Japan, Australia, and South Korea.

• Stronger naval and air patrols in disputed waters, particularly in the West Philippine Sea.

• A more assertive stance against Chinese maritime activities, aligning more closely with US strategies to counter Beijing's regional influence.

The Philippine military, however, faces significant limitations due to aging equipment and resource constraints. This presents an opportunity for Manila to negotiate for additional US military assistance. Instead of acquiring brand-new equipment, the AFP could request surplus US military assets, enabling cost-effective modernization while aligning with US strategic goals.

Conclusion

Significantly, to enhance regional deterrence which is the 2025 focus of both states, US and RP agreed on several new defense initiatives, including:

• Deploying advanced weapon systems like NMESIS to strengthen maritime defense.

• Joint special operations training in strategic locations such as the Batanes Islands.

• Deepening defense industrial collaboration by improving supply chains and exploring co-production opportunities.

• Enhancing cybersecurity through a joint initiative to protect critical networks and enable better intelligence-sharing.

From this backdrop, the recent visit posts US shift toward the Indo-Pacific and it presents both opportunities and challenges for the Philippines. While it enhances security guarantees, it also raises concerns over increased military spending, procurement dependencies, and geopolitical risks. Philippines must strategically navigate its defense commitments, ensuring that its military modernization remains sustainable and beneficial while maintaining a balanced diplomatic approach with both US and China.

On the side note, Ukraine was never going to "win" in the way Western leaders promised. The cost of the war in lives, national destruction, and geopolitical instability was immense. The United States and its allies knowingly sabotaged peace opportunities, choosing instead to drag out the conflict at the expense of Ukrainian lives.

Again, the last US Visit to the Philippines is a testament that as US prepares to shift its strategic focus to China, Ukraine is left to face the grim reality that it was used and discarded. Europe, once hopeful that it could contain Russia, now finds itself economically weakened and strategically isolated. And the Western war narrative, built on fragile geopolitical tendency, remains immune to accountability.

Ultimately, this war has no real winners except for the defense contractors and political elites who profited from its prolongation. What will be more focused indeed is the WPS and SCS as wells as Taiwan Strait defense and security issues where Indo-Pacific Quadrilateral Security is highly involved.

*Ideas and/or views expressed here are entirely independent and not in any form represent author's organization and affiliation.

• Jumel G. Estrañero is a defense, security, & political analyst and a university lecturer in the Philippines. He worked in the Armed Forces of the Philippines, Office of Civil Defense, National Security Council-Office of the President, and currently in the Department of the National Defense. He is currently teaching in De La Salle University Philippines while in the government and formerly taught at Lyceum of the Philippines as part-time lecturer. He is the co-author of the books titled: Disruptive Innovations, Transnational Organized Crime and Terrorism: A Philippine Terrorism Handbook, and Global Security Studies Journal (Springer Link, United States). He is an alumnus of National Defense College of the Philippines (NDCP), ASEAN Law Academy Advanced Program in Center for International Law, National University Singapore and Geneva Centre for Security Policy, Switzerland. He is also a Juris Doctor student and specializing in geopolitics, SCS/WPS disputes, international law, strategic intelligence, public policy, and AI impacts. 
• Atty. Fatima J. Saquilayan, JD, CRSP, CPHR, OADRArb is a Certified Data Privacy Officer (DPO), Certified Recruitment and Selection Professional, Certified Professional in Human Resources (CPHR), and a full-fledged Arbitrator approved by Office for Alternative Dispute Resolution, Department of Justice.  She is currently a Human Resource Director, Emilio Aguinaldo College; Legal Counsel, Cavite Historical Society; and an Educator: Claro M. Recto Academy of Advanced Studies (Lyceum of the Philippines); Associate Professorial Lecturer at De La Salle University Philippines; and Law Professor at Emilio Aguinaldo College-Institute of the Law and Justice. Her research interests focus on international relations, humanitarian security, sustainable development, and labor law and migration, and cybersecurity.