MINDANAO, Philippines–Ever since incoming Philippine President Rodrigo Duterte announced his willingness to hold bilateral talks with Beijing to discuss the South China Sea dispute, Manila has received no serious reports of China’s coast guard driving away Filipino fishermen in the Scarborough Shoal. Nor have there been reports of harassment by Chinese cutters against the Philippine Navy in the same area.

The observations were made by both the Philippine Navy and Professor Rommel Banaoi, director of the Center for Intelligence and National Security Studies, a non-government research group in the Philippines, which has been monitoring China’s aggression in the West Philippine Sea.

In Beijing, the South China Morning Post also reported that Li Jie, a China-based military expert, said China would maintain friendly relations before the inauguration of Duterte at the end of this month.

President-elect Rodrigo “Digong” Duterte speaks during a news conference in his hometown Davao City in southern Philippines, May 16, 2016. REUTERS/Stringer

Bilateral talks with China?

Earlier, US president Obama phoned Duterte to congratulate the on his presidential victory after the former Davao City mayor garnered at least 16 million votes in the recently concluded Philippine elections. Duterte used the call to inform Obama that he was open to the idea of having bilateral talks with China to resolve the South China Sea tensions. However, Duterte assured Obama that the Philippines will continue to regard the US as an ally in the South China Sea dispute.

All this took place against the backdrop on an earlier warning by the Pentagon that it would take action if Beijing continues with further reclamation activities in the area. China, for its part, belittled the US warning and boldly challenged Washington at a Singapore military forum this weekend by asserting that China doesn’t fear any trouble in the South China Sea.

Chinese Admiral Sun Jianguo was quoted by Singapore’s Business Insider as saying, “We do not make trouble, but we have no fear of trouble.”

Many Filipinos are surprised on how Duterte’s pronouncements appear to have pacified China’s aggression in the South China Sea. China ignored Duterte’s predecessor, former President Benigno Aquino Jr., despite the latter’s warning to stop island reclamation activities in the disputed waters. Several Manila-based Chinese diplomats also flew down to Davao City recently to congratulate Duterte on his election victory.

Analysts believe that Duterte made the “bilateral talks” announcements as the best way to diffuse Sino-Philippine tensions.

Chinese investment in Mindanao

When asked what are the possible implications of the proposed bilateral talks, Dr. Adrian Semorlan,the  Asian Sociology Professor of Western Mindanao State University, told Asia Times that Duterte has earned the respect of the Chinese government. If these bilateral talks succeed, he believes China will invest heavily in infrastructure projects in Mindanao. This, in turn, will stimulate Mindanao’s economy — something Duterte would like to see happen.

Duterte, who hails from Mindanao, earlier called on China to build a railway system on the island that will connect different urban centers.

Professor Al-Ghani Mohammad, a political science lecturer, told Asia Times that Chinese investment in Mindanao, on the heels of successful bilateral talks, will be a win-win situation for both nations.

Old baggage weighs

Signs of a possible thaw contrasts with the tensions that have marred Manila and Beijing’s diplomatic ties over the last last three years. The Philippines brought the territorial dispute before various ASEAN forums as well as the UN tribunal court in the Hague. China, however, ignored the moves and reiterated that it would not participate in the case-hearing sessions.

Members of Philippine Marines is pictured at BRP Sierra Madre, a dilapidated Philippine Navy ship that has been aground since 1999 and became a Philippine military detachment on the disputed Second Thomas Shoal, part of the Spratly Islands, in the South China Sea March 29, 2014. Picture taken March 29, 2014. REUTERS/Erik De Castro

While the US continues to be a strong economic ally of the Philippines, it also continues to dispatch military assets to the West Philippine Sea to capitalize on the freedom of navigation issue with China. The US is undertaking such actions despite China’s announcement of an Air Defense Identification Zone (ADIZ) in the South China Sea.

The US government has also hinted that it would like to establish eight US military facilities in the Philippines under the Enhanced Defense Cooperation Agreement (EDCA), a US-Philippine executive agreement that will allow US military troops to be stationed in identified areas of the country.

In Cagayan de Oro, which the US has identified as one of its prospective military sites, about 2,500 protesters staged a rally warning locals that the proposed military facility will only endanger the locals’ security.

Rally organizer Bimboy Labuntog told the local media that the presence of a US military facility in the area doesn’t allow Filipinos to claim that they have sovereignty in their own country. “The facility will be a symbol of the US presence that will dominate and dictate how our country is being governed,” he said.

In a another wrinkle for Washington, China’s trade with the Philippines has overtaken that of the US. The two-way goods and services trade between the US and the Philippines totaled $14.3 billion in 2014 (latest available data) while Philippines-China bilateral trade reached $18.6 billion in the same year, according to the Philippine Statistics Authority.

Noel Tarrazona is a freelance international journalist and lecturer. He is a senior analyst of Wikistrat and used to report for New Canadian Media based in Ottawa, Canada and Channel News Asia in Singapore. He can be reached at ntarrazona@gmail.com

Noel Tarrazona

Noel Tarrazona is a freelance international journalist and a graduate school lecturer.

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