Bongbong Attempts to Strike a Deal in DC
From July 20–22, 2025, Philippine President Ferdinand “Bongbong” Marcos Jr. made a high‑stakes visit to Washington, meeting President Donald Trump, Defense Secretary Pete Hegseth, Secretary of State Marco Rubio, and senior economic advisers. The trip combined urgent trade negotiations with a significant upgrade of U.S.–Philippine defense ties.
On security, talks centered on expanding the Enhanced Defense Cooperation Agreement (EDCA), accelerating missile and unmanned system deployments, and scaling up joint exercises like Balikatan 2025, which involved over 14,000 troops. On trade, Marcos sought to avert 20% U.S. tariffs on Philippine goods scheduled for August 1, offering market openings and investment incentives in return.
China’s reaction was swift, denouncing the meetings as “provocative” and hinting at economic retaliation. This visit marks a strategic pivot: Manila tightening its U.S. alignment in defense while seeking to safeguard vital export markets and supply chains.
Base Case – Managed Alignment (≈60%)
The U.S. and the Philippines finalize a limited trade agreement before the August 1 tariff deadline, suspending most new duties while committing to future sector‑specific talks. Defense integration deepens through expanded EDCA sites and steady joint exercises, but without large permanent U.S. basing. China issues sharp statements and conducts symbolic naval drills but stops short of major economic retaliation, maintaining normal trade flows. Investor confidence in the Philippines improves modestly, and Marcos leverages the visit to show he can balance U.S. security ties with a pragmatic approach to China.
Upside Case – Strategic Partnership Breakthrough (≈25%)
Trade talks deliver a comprehensive bilateral framework by year‑end, eliminating the tariff threat and opening U.S. markets to more Philippine exports while channeling U.S. investment into shipbuilding and tech hubs. Defense cooperation accelerates further, with joint co‑production deals signed for missile systems and drones, creating significant local industry growth. China issues warnings but tempers its response due to its own economic pressures, leading to a period of relative calm in the South China Sea. Philippine GDP growth outperforms expectations as investor inflows rise and regional trade routes stabilize.
Downside Case – Escalation and Retaliation (≈15%)
Trade negotiations stall, the 20% tariffs take effect, and U.S.–Philippine relations are dominated by disputes over market access despite defense progress. China responds to Manila’s closer military ties with aggressive maritime actions and selective economic retaliation, targeting Philippine agricultural exports and limiting tourist flows. Domestic sectors reliant on Chinese markets suffer, while rising defense expenditures strain the national budget. Investor sentiment weakens, creating volatility in Philippine markets and slowing long‑planned infrastructure projects tied to U.S. cooperation.
