US plotting a military comeback at Philippines’ Subic Bay

Subic Bay is back in play as the Philippines weighs US security guarantees against China’s economic leverage and military pressure, a high-stakes balancing act between survival and prosperity.

This month, multiple media outlets reported that the US Navy plans to establish a military storage facility in the Philippines’ Subic Bay by September 2026, according to lease documents.

The US has requested proposals for a five-year lease on a 25,000-square-meter climate-controlled warehouse and maintenance shop within the Subic Bay Metropolitan Authority Freeport area, located within 16 kilometers of the existing US Marine Corps prepositioning program site.

The facility, which reportedly will not be used to stockpile munitions, is designed for the storage and maintenance of vehicles and equipment and will accommodate up to 60 personnel. The move follows a smaller April solicitation and marks one of the most significant US developments in Subic Bay since US bases were closed in the 1990s, when Subic was converted into a special economic zone.

Aside from that US facility, US and Philippine officials have greenlit a separate munitions plant, touted as the world’s largest weapons manufacturing hub, which is intended to boost Philippine defense self-reliance and US forward posture.

Subic Bay, once one of the largest US naval hubs in Asia, has regained prominence amid tensions in the South China Sea and Taiwan Strait. The US and the Philippines are expanding defense cooperation under the 2014 Enhanced Defense Cooperation Agreement (EDCA), which now covers hundreds of activities annually, and are jointly modernizing facilities across the Philippines.

Philippine Defense Secretary Gilberto Teodoro has signaled openness to further US military investments, framing them as opportunities to enhance resilience, create employment and facilitate technology transfer.

Subic Bay’s revival highlights the Philippines’ dual role as a forward logistics hub in an intensifying superpower rivalry, and a small power balancing security from the US with economic ties to China. The Philippines is a critical node of the US First Island Chain strategy, in which the US aims to contain China through Japan, Taiwan and the Philippines.

Sustaining US combat power in contested environments requires a fundamental rethink of logistics. Joslyn Fleming and other writers emphasized in a March 2024 RAND report that as the US Navy transitions to distributed maritime operations (DMO), adversaries’ ability to target transportation hubs could render traditional resupply methods untenable.

Furthermore, Samuel Winegar warns in a December 2022 Proceedings article that, in the event of a possible Taiwan contingency, China would likely target US Navy resupply vessels and depots across the Indo-Pacific, exploiting the asymmetry of operating in its backyard while forcing the US to sustain forces from afar.

Christopher Salerno reinforced the point in a September 2025 Military Review article, arguing that without a shift to distributed systems, US credibility would erode as all its service concepts depend on dispersed operations.

Zeroing in on the Philippines’ role in US strategy, Michael Mazarr and others note in a June 2025 RAND report that the country’s location along key intra-theater lift routes makes it an obvious candidate for forward sustainment nodes.

Regarding the selection of Subic as a critical munitions plant, the US Defense Appropriations Act for 2026 highlights the absence of a forward-positioned ammunition production facility in the Indo-Pacific, despite multiple bipartisan Congressional directives to create one. 

The act states that the facility would enable quick resupply and sustainment during a high-end conflict, especially in a Taiwan contingency, while also mitigating risks associated with lengthy logistics routes and contested maritime regions. Additionally, it aims to decrease reliance on stockpiles located in the US mainland and trans-Pacific supply routes.

While the Philippines needs US assistance to strengthen its military stance against China, domestic politics also play a significant role.

As Alvin Camba points out in a 2023 article in the peer-reviewed Journal of Contemporary East Asia Studies, Philippine President Ferdinand Marcos Jr’s approach to the US is a political survival strategy – one that involves aligning more closely with the US to weaken the rival Duterte dynasty and exploit public anger over Chinese maritime incursions.

Camba adds that Marcos Jr’s acceptance of additional EDCA bases (and other US facilities) and pursuit of stronger defense ties with Japan, Australia and South Korea are strategies to consolidate his own political power and marginalize Duterte-aligned elites.

However, Derek Grossman points out in a February 2023 Foreign Policy article that there are limits to how far Marcos Jr can push this alignment-for-survival strategy. Grossman says it is unlikely the US will regain complete control of Subic, as the Philippine Constitution expressly prohibits foreign bases on Philippine territory unless approved by the country’s Senate.

Economic woes may also temper the Marcos Jr administration’s stance in aligning with the US. As Camba points out, Marcos Jr’s alignment with the US is premised on the assumption that closer ties with the US would not affect the Philippines’ economic ties to China.

That position makes the Philippines no different from Australia or Japan, the latter two of which seek economic clout with China while building up their militaries, strengthening their alliances with the US and diversifying their security partners – reflecting caution against China’s pragmatic use of economic leverage to advance its geopolitical aims.

Slumping foreign investment may incentivize the Philippines to calibrate its future engagement with the US. According to Philippine Statistics Authority (PSA) data via Manila Standard reporting, foreign investment commitments in the Philippines fell sharply by 64.4% in the second quarter of 2025, totaling 67.38 billion pesos (US$1.16 billion)—a steep decline from the 189.50 billion pesos ($3.26 billion) recorded over the same period last year.

Furthermore, the Philippine Economic Zone Authority (PEZA) mentions that China remains one of the Philippines’ top foreign investors, accounting for 22% of total foreign investments as of June 2025. With Subic reaffirming the US’s presence in the Pacific, the Philippines finds itself pulled between the former’s shield and China’s purse. Its survival now hinges on how deftly it can walk this tightrope of security and economics.