TAIPEI - The Philippines is showing new signs this month of strengthening an alliance with China and weakening ties with its old friend, the United States, giving Beijing a key partner in its controversial maritime expansion and Manila a source of long-term investment.



The Chinese and Philippine coast guards met for the first time Friday in Manila and agreed to pursue maritime cooperation. Their claims to the South China Sea overlap, causing friction that prompted the Philippines to take China to a world court tribunal - and win the case in July.



On Sunday the Philippine defense secretary said he didn’t know the U.S. Navy was using an underwater drone less than 100 kilometers (just 50 nautical miles) from his country's shores. A Chinese naval lifeboat had seized the submersible device, setting off a spat with the United States that was resolved when the Chinese handed the device back to the U.S.



Commenting on the U.S.-Chinese contact in that area of the South China Sea, the Philippine defense secretary said his country would not object to Chinese naval activity in the area.



'Moderate approach' toward China



“The Philippines has taken a rather moderate approach toward the Chinese position on the status of the claims in the South China Sea,” said Carl Baker, director of programs at the think tank Pacific Forum CSIS in Honolulu. “For one thing, it has said that it now agrees with China that bilateral negotiation is the best way to resolve the territorial dispute, and that in the meantime they need to accommodate rival claims.”



Bilateral talks would be an alternative to the world court.



Philippine President Rodrigo Duterte led the shift toward China shortly after taking office June 30, to diversify foreign policy away from the United States.



The U.S. government frustrates China in the contested sea by insisting on its freedom of navigation and cruising through areas close to those claimed by China. Beijing's militarization of the sea, and its use of land reclamation to expand tiny islets, has alarmed much of Southeast Asia.

Philippines President Rodrigo Duterte (L) and Zhan FILE - Philippines President Rodrigo Duterte (L) and Zhang Dejiang, Chairman of the Standing Committee of the National People's Congress of China hold a meeting at the Great Hall of the People in Beijing. FILE - Philippines President Rodrigo Duterte (L) and Zhang Dejiang, Chairman of the Standing Committee of the National People's Congress of China hold a meeting at the Great Hall of the People in Beijing.

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China to invest in Philippines



When Duterte visited Beijing in October, he and his hosts agreed to set aside the maritime sovereignty issue, and China pledged $24 billion in investments in the island nation.



Last week, Duterte threatened again to cut off U.S. military cooperation because the American poverty relief agency Millennium Challenge Corp. said it would defer a $433 million funding grant, due to concerns about rule of law and civil liberties. Duterte told the United States Saturday to “prepare to leave the Philippines.”



The grant deferral follows U.S. President Barack Obama's critical comments three months ago about extrajudicial killings in the Philippines' war against illegal drugs. At least 5,000 people have died during the antidrug campaign, according to the vice president’s office in Manila.



Duterte's latest anti-U.S. remarks followed a trip he made to Cambodia, a staunch ally of China. Cambodian Prime Minister Hun Sen said he respected Duterte for standing up to Western powers, Philippine media reported.



As relations warm, both China and the Philippines will try to enlarge their artificial islands, build new structures on them and improve on existing infrastructure, the Pacific Forum's Baker said.



Averting maritime 'miscalculations'



Both sides as well as other Southeast Asian claimants to the disputed sea may also work toward a code of conduct designed to head off accidents due to miscalculations over which islets are whose, some experts believe.



Brunei, Malaysia, Taiwan and Vietnam also claim all or parts of the 3.5 million-square-kilometer sea, which is rich in fisheries as well as possible undersea fossil fuel reserves.



Manila’s establishment of ties with China since Duterte took office in June initially worried many Filipinos who are used to relying on the United States, a former colonizer of some five decades. U.S. military support has helped the Philippines patrol its shorelines for Chinese boats and reduce the threat of terrorism from Muslim rebel groups in the south.



But some Filipinos are now warming to the pro-China stance, as part of a balanced foreign policy rather than one dependent largely on Washington since World War II. Valenice Balace, an internet entrepreneur in Manila, worries that continued resistance to Beijing could spark war over the Spratly Islands, a South China Sea archipelago where both sides hold land.



“I was thinking of the options of the Philippines. We could go with the tribunal results, wherein Philippine Spratlys is really part of the Philippines, but China’s reaction was no, it’s still theirs, and they still continue with whatever it is they were doing in the Spratlys,” Balace said.

FILE - Chinese dredging vessels are purportedly se FILE - Chinese dredging vessels are purportedly seen around Fiery Cross Reef in the disputed Spratly Islands in the South China Sea in this image from video taken by a P-8A Poseidon surveillance aircraft provided by the U.S. Navy. FILE - Chinese dredging vessels are purportedly seen around Fiery Cross Reef in the disputed Spratly Islands in the South China Sea in this image from video taken by a P-8A Poseidon surveillance aircraft provided by the U.S. Navy.

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Delicate diplomacy by Manila



“China is quite big, and the only chance we could ever win against China would be through the U.S.,” she said. “So if there would be war over the Spratlys, China would bring in their guns. Where would the fight happen? It would be most probably in the Philippines. So it wouldn’t hurt the U.S. It would hurt us because we’re already a poor country.”



China’s claim to about 95 percent of the sea, based on historical records, caused trouble with the Philippines in 2012 when vessels from both sides got locked in a two-month standoff at Scarborough Shoal, nearly 200 kilometers west of Luzon Island.



A South China Sea made safer by Sino-Philippine cooperation would offer more protection to fishing boats, said Song Seng Wun, an economist in the private banking unit of CIMB in Singapore. Fishing makes up 2 percent of the Philippine economy.



Some Chinese investment is seen helping Philippine infrastructure and manufacturing, areas that the government has identified as pivotal for sustaining fast economic growth in a still largely poor country.



“It’s easier if you have a large neighbor that you’re friendly with, and then you can strengthen economic ties, [from] a pragmatic standpoint,” Song said. “The key thing for people on the ground really is food on the table, money in the pocket and opportunity for business expansion, and it looks like there will be.”