Manila walks fine line between Beijing and Washington in South China Sea

Under its vocally anti-American President Rodrigo Duterte, the Philippines has emerged as a focal point between China and the US in their continuing contest for dominance in the region.

After years of cosier ties between Manila and Beijing, at the expense of the Philippines' traditional alliance with the US, Duterte last month appeared to signal a retreat from his anti-Washington stance by reversing an earlier decision to scrap a key military agreement with the US in June.

While analysts say Duterte is unlikely to change his policy on China any time soon, the shift to reinstate the Visiting Forces Agreement - which gives legal status to US troops stationed in the country - underlines the difficult balancing act the Philippines must strike in its dealings with the two powers.

As tensions have flared between China and the US, the Philippines has become part of their strategic confrontation amid Beijing's growing aggression in the resource-rich South China Sea - also one of the world's busiest shipping routes - where China's claims to most of the waters are disputed by the Philippines, Vietnam, Malaysia, Brunei and Taiwan.

Washington needs the support of Manila and other key partners in Southeast Asia in its efforts to push back on Beijing's ambitions in the region. For China, maintaining ties with the Philippines is equally important amid its rising confrontation with the US.

The US took a stronger stance in the middle of July when Secretary of State Mike Pompeo declared support for the 2016 ruling by an international tribunal which rejected most of Beijing's claims in the South China Sea.

It was a historic victory for the Philippines, which took the dispute to The Hague, but China has never accepted the decision. Beijing said the latest US policy statement on the issue "deliberately stokes territorial and maritime disputes".

The Philippines backed the US stance, calling on China to accept the ruling. In his State of the Union address on Monday, Duterte argued the Philippines was "neither beholden nor a pawn to anyone" in the South China Sea, but also made clear the country was not prepared to go to war over its competing claims with Beijing.

"China is claiming it," he said. "We are claiming it. China has the arms, we do not have the arms. So, it is simple as that. They are in possession of the property."

In addition to their rivalry in the South China Sea, China and the US both have clear trade and investment interests in their relations with the Philippines.