AT a time of heightened global anxieties and regional uncertainty, the Philippines and the United States launched the 41st Balikatan Exercises on April 20, 2026. With the participation of partner nations, including Australia, Canada, France, Japan and New Zealand, the 2026 Balikatan is being held while the Iran war continues and tensions in the South China Sea remain unresolved.
China remains suspicious of the strategic intentions of this annual military exercise despite the US declaration that the military drill is not aimed at Beijing. For the Philippines, the main challenge is how to sustain dialogue and cooperation with China while strengthening its alliance with the US. Balancing these relationships with two great powers is essential for Philippine security, economic development and regional stability.
Balikatan’s strategic role
For the Philippine government, the Balikatan remains useful for enhancing the Armed Forces of the Philippines’ (AFP) interoperability with US forces. These exercises improve Philippine military capacity in disaster response, maritime domain awareness and external defense capabilities.
Yet, military drills under the Balikatan must be framed as defensive and cooperative, not provocative. It is paramount for Manila to convince China that Balikatan is not directed against Beijing but is part of a broader effort to build resilience in an increasingly complex environment.
Sustaining dialogue, cooperation with China
China is not only a major trading partner but also a central actor in the South China Sea. While Balikatan can strengthen Philippine defense capability, it cannot substitute for diplomacy.
Manila must sustain dialogue with Beijing to manage disputes peacefully and avoid miscalculation. Current talks on joint oil and gas development projects, joint fishery management and maritime safety in contested waters can serve as confidence-building measures, providing economic benefits while reducing tensions over sovereignty claims. Such cooperation would demonstrate that Manila is capable of pursuing pragmatic solutions that balance security concerns with economic imperatives. Beyond energy, continued engagement with China in trade, infrastructure and investment will help ensure that the Philippines benefits from regional economic integration while maintaining stability in Philippines-China relations, especially in the context of maritime disputes.
Iran war’s implications
The Iran war is complicating the current strategic environment. With US forces heavily engaged in the Middle East, Washington looks to allies in Asia to demonstrate solidarity.
Balikatan, therefore, carries symbolic weight beyond the Philippines. Yet Manila must avoid entanglement in conflicts outside its immediate region. Philippine security priorities must remain focused on defending sovereignty in the West Philippine Sea while promoting maritime stability in Southeast Asia.
Balanced strategy
To navigate this complex environment, the Philippines should adopt a balanced strategy.
First, the Philippines can continue to strengthen defense cooperation with the US through Balikatan, ensuring that the AFP develops credible defense and resilience. But Manila needs to emphasize that building defense capability is not targeting China but supporting efforts to promote regional peace and stability.
Second, it is imperative for Manila to institutionalize sustained dialogue with China through the bilateral consultative mechanism (BCM). With the BCM, the Philippines can pursue dispute management and economic cooperation with China, particularly through joint oil and gas development, fishery management cooperation, maritime security and navigational safety in the South China Sea.
Third, the Philippines can maximize economic opportunities with the US by taking ownership of the Luzon Economic Corridor (LEC), which links infrastructure development, logistics and energy projects to broader security resilience. This initiative demonstrates that the alliance with Washington is not solely military but also developmental. Importantly, the LEC can, in fact, complement China’s Belt and Road Initiative (BRI), positioning the Philippines as a bridge between US and Chinese economic strategies. By harmonizing these projects, Manila can show that cooperation with both powers is possible and mutually beneficial.
Fourth, Manila should actively leverage mechanisms led by the Association of Southeast Asian Nations (Asean) as neutral platforms for dialogue. The Asean Regional Forum (ARF) provides a venue for security discussions involving both China and the US, while ongoing negotiations for a binding Code of Conduct (COC) in the South China Sea offer a framework for managing disputes peacefully. By anchoring its balancing strategy within Asean, the Philippines can reduce tensions, promote collective security and reinforce its role as a constructive regional actor.
Finally, the Philippines should invest in its own defense modernization to reduce overdependence on external powers and to assert its sovereignty more effectively. The Philippines can revisit the Self-Reliance Defense Posture project to develop its strategic autonomy.
PH as mediator
Balikatan 2026 is not merely a military exercise; it is a test of Philippine strategic prudence. The Philippines must show that it can strengthen its alliance with Washington while keeping open channels of dialogue and cooperation with Beijing.
In a region destabilized by great power rivalry and distant wars, strategic balance is the key upholding defense readiness coupled with sustained diplomacy. By pursuing joint energy cooperation and BRI projects with China, advancing the LEC with the US and leveraging Asean mechanisms like the ARF and the COC negotiations, Manila can demonstrate that security and development go hand in hand.
Looking forward, the Philippines has the opportunity to position itself not only as a balancer but also as a mediator — bridging US and Chinese interests through Asean platforms. By doing so, Manila can advance not only its national security interests but also a more stable and cooperative Asia-Pacific.
Rommel C. Banlaoi, PhD, is the president of Philippine Society for International Security Studies and director of the Philippines-China Studies Center at Diliman College.
