A Game of Chicken: What the Marcos-China reset should look like
In March 2026, President Ferdinand Marcos told Bloomberg that the Iran war could revive stalled oil and gas talks with China, as Strait of Hormuz-driven fuel shortages pushed him toward Beijing. Four months later, on July 20, a China Coast Guard crew member struck a Philippine Navy serviceman on the head with a wooden baton near Ayungin Shoal, and Marcos summoned the Chinese ambassador. Less than four weeks later, at the FOCAP Presidential Luncheon on August 14, he was still defending his “reset” as a return to talking with “our friends in China” whenever tensions rise. Five weeks later, on September 18, a Chinese vessel rammed the BFAR ship BRP Datu Magat Salamat as it delivered fuel subsidies to Filipino fisherfolk off Palawan.
The pattern should be obvious to our government decision-makers by now. The president reassures, and Beijing escalates. President Marcos takes a step back, and Beijing waits a few weeks and escalates again. Reassurance may not cause the violence; it has simply not bought restraint.
Officials say incidents are down from last year, but fewer incidents do not mean less coercion. That is not two tracks running in parallel. That is a president being gamed and being told that absorbing hits is smart strategy. Unless the lesson is still lost to government, appeasement of coercive powers like China is not restraint nor good faith. It's permission for coercion and further escalation.
The game
Coercive engagement is known in game theory as a game of Chicken. Two drivers speed toward each other on a narrow road; whoever swerves first loses face, and if neither swerve, both crash. The model is imperfect, since one car is far bigger, but it gets the incentives right.
This is the most intuitive way to understand any single encounter between the Philippines and China at Recto Bank, Ayungin Shoal or Bajo de Masinloc: a water cannon, a blocked resupply run, a rammed civilian ship, or an injured crew. Neither side wants a war. Both want the other to blink. But blinking is not our objective. It is protecting our people and our ability to resupply, patrol and fish in our own waters. Swerving can be the smart move. The loss comes when it leaves us with less road.
But this framing does not explain why coercion keeps recurring, or why it so often ends in de-escalation from the Philippine side. For that, we need to understand path dependence or the idea that choices made in round one quietly set the terms for every succeeding round, because each choice makes the alternatives costlier.
Every incident at sea is one round of Chicken, and this is Chicken played on repeatedly for decades. Repetition creates patterns. If pressure reliably ends with Philippines conceding something lasting, Beijing will keep applying it.
If the Philippines completes its mission and refuses the demand, de-escalation is just good driving. In this repeated game, always being the first to swerve and call for de-escalation becomes a persistent signal of surrender whenever it ends with Beijing keeping what it grabbed.
What Philippine decision-makers cannot admit is the uncomfortable reality that it is easier to look at any single incident in isolation, because cooling things down afterward is almost always the diplomatically sensible move. Cooling down protects lives and public evidence builds the record, but the statement, the video and the protest cannot always be the end of the response.
Defense Secretary Teodoro said the day after the baton-strike incident that these instances should not be taken in isolation. What indeed counts is what follows the press release. Do the missions continue, are our people safer, and is the next act of coercion less likely to pay off?
But a series of reasonable decisions can add up to an unfortunate result. What is "reasonable in isolation" is fully compatible with "dignified capitulation" in the aggregate. If each settlement leaves our vessels with less access and more in need of Chinese cooperation, then those losses outlast the danger.
None of this makes de-escalation the enemy. It becomes the problem when it preserves what coercion won. A policy instinct that treats de-escalation as the automatic response to any incident, whatever it leaves behind, keeps recalibrating the baseline in China’s favor, one defensible decision at a time. The test is what remains afterward: who can sail, which missions can proceed, and whether a temporary precaution has quietly become permanent.
The exploited dependency
Cory Doctorow coined a term in an entirely different domain that captures this mechanism with uncomfortable precision: enshittification. It describes how digital platforms decay in three stages. First, the platform is genuinely good to its users, because it needs them locked in. Then it squeezes those users to please its business customers. Finally it squeezes the customers too, and barely bothers to disguise the extraction, because leaving is now more expensive than tolerating it. Beijing is not a platform, but the lock-in logic is worth watching for.
Strip away the tech-industry framing, and it describes how a “reasonable compromise” or “confidence-building measure” between a stronger and weaker party can function at sea. An arrangement meant to reduce miscalculation and give both sides a predictable process, such as the provisional understanding on the rotation and resupply (RORE) of BRP Sierra Madre, may instantly look like a win for the Philippines. Credit where it is due as the DFA counts 15 incident-free resupply missions since July 2024. That is a real and narrow gain.
Dialogue itself is not the problem. Talking to Beijing does not require believing in its good faith. The danger is two habits hiding behind it. Those are dependence on a narrow set of suppliers for things we cannot do without, and the institutional muscle memory of agencies reluctant to revise arrangements in which they have invested their credibility. The first needs practical alternatives and the second regular review.
Diplomatic resolution of disputes should be an active choice rather than a default position, otherwise, the rules of the game shift without the Philippines ever formally agreeing to worse terms. For example, after the July 20 incident, Beijing said its actions were triggered by construction work aboard BRP Sierra Madre, which it argued breached the spirit of the provisional understanding. The DFA denies that the understanding restricts any Philippine right. Whoever is right about the text, an arrangement meant to prevent incidents is now being cited to justify one. The longer Manila waits, the more any correction will be read as the escalatory act, not the accumulated pressure that made it necessary.
Keeping trade open protects livelihoods, and no one wants every collision at sea to hold the whole economy hostage. But the lock-in shows up again in the habit of walling off maritime friction from the rest of the relationship, so that investment, tourism, and energy cooperation proceed undisturbed no matter what happens at sea the week before or the month after. Everyday trade can stay insulated. New political concessions cannot.
If China can escalate at sea in the morning and face uninterrupted economic engagement in the afternoon, the confrontation has been made close to costless everywhere except the one domain where China already holds the advantage. The answer is not slamming the door on trade, which could hurt Filipinos more than Beijing, but having a few responses we can sustain that also puts Beijing on notice.
A posture that quarantines economic and political ties from maritime conduct hands that leverage away before the game even starts. Big trade numbers are not the danger. Having no workable alternative is.
Breaking dependencies
When fuel prices spike, Filipinos feel it at the pump. When fertilizer becomes scarce, they feel it at the table. Both vulnerabilities are real, and both are national security problems, because a public that cannot afford resistance will not sustain it. Buying from China may bring short-term relief, but the offered reset does not cure the vulnerability, and it risks making mendicants out of Filipinos. The week before it sanctioned Defense Secretary Teodoro, Beijing accused him of ingratitude for Chinese commodity supplies.
A joint oil and gas project in Recto Bank will not solve our fuel problems. President Marcos himself says the parties are working on the terms of reference, and exploration is not production. Depending on who controls development and who can interrupt it, it could turn maritime engagements into a hostage situation with better branding. Lest we forget, China barred our Defense Secretary and his family from entering China over remarks it called “erroneous,” Former senator Francis Tolentino was also sanctioned in the same manner for leading the passage of the maritime zones and archipelagic sea lanes laws. We should not build our fuel and food security on China’s kindness.
The same goes for the proposed update of the 2016 arrangement between the China Coast Guard and the Philippine Coast Guard. There are disagreements between the Philippines and China on what the proposed Memorandum on Understanding between the PCG and CCG contains; our view is that signing anything while water-cannoning and ramming continue is not confidence-building unless the text gives us an enforceable remedy when its terms are ignored.
If each government agency keeps fueling this dependency within its own mandate, every ramming, every baton strike and, heaven forbid, a Filipino service member’s life gets measured against tourist arrivals, gas prices and the price of rice. Those are not trivial because households feel them first. Beijing is counting on winning that math, and it will unless the Philippine government accounts for both the risks our people face at sea and the pressure our households bear ashore.
The wise reset, then, is not to build on today's dependencies, a genuine one must run the other way. Our goal must be singular: break the dependencies now, before Beijing decides how the next emergency plays out.
That does not mean cutting every tie or gambling on a conflict we cannot fund. It means three things. First, diversify fuel, fertilizer, and other essential supplies, and build reserves, where replacement is feasible. Second, fund the AFP Modernization Program and Self-Reliant Defense Posture projects that can keep lawful missions going despite pressure from Beijing’s forces at sea. Third, require any new discretionary cooperation with Beijing contingent on its conduct at sea, while keeping emergency communication open.
The test of a reset is whether the Philippines government can protect its people and exercise its rights when Beijing applies pressure. Fix the leaks while the boat is still afloat – not after it takes water, with Beijing holding the patch.
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Jesse M. Pascasio is a trustee of the Foundation for the National Interest and formerly worked with the Philippines’ Office of the President on strategic maritime concerns.
Julio Amador III is a trustee of the Foundation for the National Interest.
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