In Manila this week, Australia and the Philippines formalized their intent to deepen military ties, setting a 2026 deadline for a binding defence agreement that both nations frame as a measured answer to China's expanding reach across the South China Sea. The pact — built on joint exercises, shared infrastructure, and a growing web of allied relationships — reflects a broader truth about this era: that smaller powers, feeling the weight of a larger neighbour's ambitions, are finding strength in deliberate alignment. At stake is not only sovereignty over contested waters, but the rules by which
PerthNow
· Aug 22, 2025
· security
· 2 min read
High
Sourcing: Verified
Australia, Philippines to seal defence pact amid South China Sea tensions
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Politics & Governance
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Bias & Framing
⚖
Article presents Australia-Philippines defence pact as reasonable response to China's 'aggressive activities,' using language that frames China negatively while presenting allied actions neutrally.
Bias Direction
center-right
Confidence
MED
Strategic framing of geopolitical competition as defensive necessity. China's actions characterized as 'aggressive' and warranting 'condemnation,' while allied military cooperation framed as appropriate 'deterrence.' The article centers official statements from allied nations without substantive counterbalance.
increasingly aggressive activities
matter not only of concern but of condemnation
widened China's trust deficit
flaring tensions
unilateral activities
Chinese government perspective beyond a request for comment that went unanswered
Analysis of how these military arrangements might appear from Beijing's strategic viewpoint
Regional perspectives from other Southeast Asian nations with competing interests
Historical context of territorial disputes and competing claims
Voices questioning the escalatory potential of increased military cooperation
Geopolitical Impact
🌎
Australia-Philippines defence pact in 2026 signals strengthened Indo-Pacific alliance against China's assertive South China Sea activities, escalating regional military competition.
Escalation Risk
moderate
Confidence
HIGH
Philippines
Australia
South China Sea
Indo-Pacific
China
Canada
Shift toward Quad-aligned coalition building; Australia deepening security partnerships with Southeast Asian nations to counterbalance Chinese regional dominance. Canada's participation indicates broader Western coordination. China faces expanding deterrence architecture challenging its South China Sea claims and operational freedom.
Similar to Cold War alliance-building patterns where smaller nations aligned with distant powers (Australia, Philippines) against regional hegemon (China), mirroring US-Japan-South Korea dynamics during Soviet containment.
Economic Lens
📈
Australia-Philippines defence pact signals increased military spending and regional geopolitical tensions, with potential impacts on defence contractors, shipping costs, and Indo-Pacific trade flows worth $4.7 trillion annually.
Market Signal
mixed
Confidence
HIGH
Defence and aerospace
Shipping and maritime logistics
Construction and infrastructure
International trade
Energy (regional supply chains)
Consumers may face higher shipping costs if South China Sea tensions escalate, affecting prices of imported goods. Increased military spending diverts government resources from social programs. Regional instability could increase insurance premiums for maritime transport.
Governments likely to increase defence budgets and military procurement. Potential for new trade restrictions or sanctions frameworks. Increased regulatory scrutiny of supply chains transiting disputed waters. Possible multilateral agreements on freedom of navigation and maritime security protocols.