Illustration: Dionne Gain The true story is bigger, more interesting and far more serious than the initial impression, for six reasons. First, the so-called caliphate is closer than we thought. Large-scale Islamist terrorism is not fixed but fungible. It moves like a virus. Daesh's territory in the Middle East - the "caliphate" - is being squeezed. As it falls, its followers have laid claim to new areas in South East Asia. As one claim fails, another another rises. "This is serious," says South East Asian terrorism expert Sidney Jones, "because a pro-ISIS group in the region has proved it can capture and hold important territory". "And this has given a boost not only to pro-ISIS groups in the Philippines but it's also a model for those in Indonesia and others outside the region," says Jones, head of the Jakarta-based Institute for Policy Analysis of Conflict. "Just today," she tells me, "there was an exchange over [instant message service] Telegram where some Indonesians said 'if they can do that in the Philippines, why can't we do it in Indonesia?'" As Indonesia's military chief, General Gatot Nurmantyo​, said last week: "It's easy to jump from Marawi to Indonesia and we must all beware of sleeper cells being activated in Indonesia."

He said there were Daesh sleeper cells in almost all of Indonesia's 34 provinces. Big flows of people around the region give the perfect cover to extremists. Jones says there is no shared terrorist watchlist among the region's governments. If the virus can transmit from Syria to the Philippines, why not to Indonesia? Second, it shows that, despite all the warnings, the terrorists can still organise on a large scale undetected. About 500 fighters had assembled in Marawi and had spent months planning their attack. They represent a new alliance between two groups, Abu Sayyaf and the Maute group, under the leadership of a chief, or so-called emir, designated by Daesh, Isnilon Hapilon​. He's a well-known terrorist for whom the FBI has offered a $5 million reward. They'll have to catch him first. Some of the terrorists were members of local Islamist insurgent groups long established on the island of Mindanao, while others had travelled from Malaysia, Saudi Arabia, Chechnya and Yemen, according to Filippino officials. They had dug tunnels for concealing plentiful supplies of arms, ammunition and food. Third, the episode shows once again that any part of the planet that is ungoverned, or even just poorly governed, is ripe for jihadi land grab. Fourth, the terrorists can adapt to exploit local weaknesses. Even though the Philippines military has been fighting Islamist insurgencies on Mindanao for decades, they were unprepared for this assault. Says Sidney Jones: "They had been going after Abu Sayaaf and others in traditional jungle warfare guerilla settings and apparently didn't have any training in urban warfare."

Fifth, the experience demonstrates that for all his tough-guy posturing, President Duterte has no idea what he's doing. Although his base is the city of Davao on the island of Mindanao, he has totally botched the challenge. The Maute group offered him a ceasefire last December; he rejected it with taunts and now he pays the price. Sixth, the international reaction shows a stark lack of leadership in marshalling any coordinated regional response. One small effort - Indonesia and Malaysia are to join the Philippines in patrolling the Sulu Sea to seek militants on the move. But ASEAN is useless, the US distracted, and China uninterested. Australia has gushed about its supposed "Asian Century". The century has arrived, not exactly as the Gillard government White Paper envisaged. But the leadership challenge is clear and Australia is moving cautiously to take it up. Loading "Australia is doing everything it can, and more than anyone else, perhaps, the authorities seem to understand the danger, even if the Australian public isn't on board," says Sidney Jones. "The aid program is absolutely critical." Canberra is moving to coordinate counter-terrorism with regional governments, and on Tuesday will announce about $1 million in aid for the displaced civilians of Marawi. Australia has 1000 troops in the Middle East and a squadron of jets fighting to crush the "caliphate" in Syria and Iraq. It's time for Australia to take extra precautions nearer home - the caliphate is closer than we think. Peter Hartcher is international editor.