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Just a few months ago, most experts in Washington and their counterparts in the Asia-Pacific region were certain the South China Sea dispute between China and the Philippines would draw the U.S.-Philippines alliance even closer together. Instead, in a move still largely baffling to Washington’s policy-makers, the Philippines’ President Rodrigo Duterte recently announced his “separation” from the United States, indicating in no uncertain terms that his nation’s foreign policy has veered toward China.

The Philippines’ president could have been grandstanding ahead of his delegation’s recent trade talks with China. Or maybe the U.S. ally of seven decades is truly pivoting away from Washington.

At the end of the day, Duterte does not seem convinced that his nation’s foreign policy interests lie predominantly in the defense of its territorial claims in the South China Sea, despite the U.S.’s backing. Instead, the prospect of economic gains to be had through China’s burgeoning New Silk Road initiative present a far greater pull than the risk of a diplomatic or military row with China.

Several regional countries are benefitting, or set to benefit, from China’s New Silk Road initiative, a major China-initiated infrastructural investment and trade project largely ignored in Washington. It is clearly not in the interest of the Philippines to be left behind on potential large-scale domestic investments and opportunities for job creation.

Where the true foreign policy interests of this island country lie can be better gleaned by looking at its recent economic alignments: In October 2014, the Philippines became a founding member of the China-led Asian Infrastructure Investment Bank (AIIB). In 2015, the Philippines turned away from joining the U.S.-led Trans-Pacific Partnership (TPP) and participated in negotiations with the Regional Comprehensive Economic Partnership (RCEP) instead — a free trade agreement with 10 ASEAN member states and its partners, including China, Japan, South Korea, India, Australia and New Zealand. Although Duterte was not in power during these negotiations, Manilla’s decision to forego TPP in favor of RCEP indicates a general preference for regional economic integration. The risk of regional diplomatic or military conflict would run contrary to that.

What has gone wrong for the United States? For starters, China was not included as part of the TPP trade deal, which was seen as a major diplomatic snub. Washington’s decision to exclude Beijing has placed regional states between a rock and a hard place of having to choose between the United States or offending a major regional power.

The Philippines is making the most of this awkward positioning by securing funding from both the United States and China for crucial state sectors.

For its security and military structures, the United States provided $441 million in security funding to the Philippines from 2002 to 2013 according to the RAND Corporation, and the Obama administration earmarked a record $120 million in military aid to the country this year alone.

Since the United States has sunk costs in the Philippines over decades as part of its military alliance, Duterte is betting that however much he lowers the diplomatic tone with Washington, the United States is too deeply invested to turn its back on the alliance.

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Now, just as the United States funded its security and military structures, Duterte is turning to China to fund its domestic infrastructure.

Duterte’s pivot toward China thus demonstrates a strategic leveraging of one major global power off of another major regional power to the Philippines’ advantage. In fact, by the end of his four-day visit to Beijing, the Philippines delegation garnered $24 billion worth of investment and financing agreements with China.

It looks as if Duterte’s gambit might be paying off, but it remains to be seen how Washington will respond.

Christine Guluzian is a visiting research fellow in defense and foreign policy studies at the Cato Institute. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.

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