The Philippine government may bring in American energy giants to develop undersea oil and minerals in the South China Sea, which could further escalate tensions.

According to the front page of the Manila Times, a memo from the Department of Trade and Industry (DTI) of the Philippines states that the country is preparing to provide comprehensive trade concessions to the United States based on a proposed bilateral agreement, which could reshape its economy.

This document was released days before President Ferdinand Marcos Jr. visited Washington, outlining the terms of the proposed reciprocal trade agreement (ART) framework, accompanied by the president's clear instructions to align closely with U.S. strategic and economic priorities.

"The Philippines needs the U.S.; without them, we can't survive," Marcos was quoted as saying - analysts warn that this statement reveals an obvious imbalance in the negotiation stance.

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After a meeting on July 16, 2025, the memo detailed unprecedented tariff reductions and import commitments favorable to U.S. exports, while allowing U.S. companies special access to the Philippines' energy, infrastructure, and mineral resources.

According to the draft agreement, the Philippines will completely eliminate the Most Favored Nation (MFN) tariffs on major U.S. agricultural exports, including soybeans, wheat meal, wheat starch, and wheat gluten.

The tariffs on crude oil and wheat seeds will be reduced from 7% to 3%, while the 15% tariff on lead-acid batteries (crucial for local manufacturing) will be completely eliminated.

The country will also commit to importing 16,000 metric tons of U.S. soybeans and wheat annually, valued at an estimated $17.2 million. The import volume of U.S. chicken thighs will increase by 15% annually.

Additional import obligations cover U.S. dairy products, hardwood used for furniture production, and even firearm components - raising concerns among Filipino industrial groups about market erosion.

The ART framework draft allows U.S. companies preferential access to the Philippines' energy and resource industries.

This includes fast-tracking petroleum and natural gas exploration in the South China Sea, infrastructure project permits, and "priority" status for building a liquefied natural gas (LNG) receiving and regasification complex in Subic Bay.

Particularly sensitive are the provisions that grant the U.S. priority access to the Philippines' nickel, cobalt, and copper reserves, which are critical minerals used in electric vehicles, semiconductors, and renewable energy systems.

Original article: https://www.toutiao.com/article/1838294978888704/

Statement: This article represents the views of the author.