Defining the parameters of the problemThe Philippine Constitution describes what is at stake in the pseudo-war with China.
From: http://www.officialgazette.gov.ph/constitutions/1987-constitution/
ARTICLE I
National Territory
The national territory comprises the Philippine archipelago, with all the islands and waters embraced therein, and all other territories over which the Philippines has sovereignty or jurisdiction, consisting of its terrestrial, fluvial, and aerial domains, including its territorial sea, the seabed, the subsoil, the insular shelves, and other submarine areas. The waters around, between, and connecting the islands of the archipelago, regardless of their breadth and dimensions, form part of the internal waters of the Philippines.
As with any properly drafted constitution, Article I does not actually layout the specifics of the boundaries of Philippine territory. Responsibility for those specifics has been given to the Legislative branch.
From: http://www.officialgazette.gov.ph/constitutions/1987-constitution/
ARTICLE VI
The Legislative Department
SECTION 1. The legislative power shall be vested in the Congress of the Philippines which shall consist of a Senate and a House of Representatives, except to the extent reserved to the people by the provision on initiative and referendum.
Congress performed its duty to define the country’s boundaries when it passed Republic Act 9522, which defined the archipelagic baseline of the territorial sea of the Philippines.
Republic Act No. 9522 March 10, 2009
AN ACT TO AMEND CERTAIN PROVISIONS OF REPUBLIC ACT NO. 3046, AS AMENDED BY REPUBLIC ACT NO. 5446, TO DEFINE THE ARCHIPELAGIC BASELINE OF THE PHILIPPINES AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::
Section 1. Section 1 of Republic Act No. 3046, entitled "An Act to Define the Baselines of the Territorial Sea of the Philippines", as amended by Section 1 of Republic Act No. 5446, is hereby amended to read as follows:
Section 1. The baselines of the Philippines archipelago are hereby defined and described specifically as follows:
Basepoint Number
This law, in turn, was written in accordance with the requirements set forth by the Philippines alignment with the United Nations Convention on the Laws Of the Sea (UNCLOS)
From: http://www.un.org/depts/los/convention_agreements/texts/unclos/part2.htm
SECTION 2. LIMITS OF THE TERRITORIAL SEA
Article
Breadth of the territorial sea
Every State has the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles, measured from baselines determined in accordance with this Convention.
The references above provide the official, legal, basis for the Philippines’ territorial claims. They are not only noteworthy for what is written in the letter of the law . . . but also for what is not codified in the document. While the law is very clear about what belongs to the Philippines, and therefore what the Philippines cannot part with, it is actually silent about how protection of such territory is implemented.
The power to enforce laws and protect Philippine sovereignty is not given to Congress and its committees that produce a never-ending series of hearings-in-aid-of-legislation. That power also does not reside in the hand of jurists who, as private citizens enjoying their rights to free speech, choose to air their personal opinions about how laws ought to be implemented. This power is the sole responsibility -- and burden -- of the Executive department.
From: http://www.officialgazette.gov.ph/constitutions/1987-constitution/
ARTICLE VII
Executive Department
SECTION 1. The executive power shall be vested in the President of the Philippines.
At the end of the day . . . how the Philippines implements foreign policy is the purview of the Executive.
Upon assuming office, the Duterte administration assumed responsibility for dealing with an agitated foreign dragon. The international
rebuff of China’s policies by the
UNCLOS tribunal was a blow to Chinese prestige. A blow at a time when the Chinese President, Xi Jin Ping was grapling with his own domestic political agenda that culminated in numerous high-profile prosecutions and/or imprisonment of retired
generals, as well as a
powerplay that abolished term limits for his office.
While political reversals could spell the end of an administration in a Philippine setting, the consequences could be more significant for authoritarian regimes like
China. In a system of government where legitimacy does not stem from consent of the governed -- as it is in a democratic system -- but rather from the perceived raw power of a central authority, perceptions of weakness are intolerable.
Therefore, a Philippines that defiantly stands up for itself, but lacks . . .
. . . the military strength of Vietnam . . .
. . . the economic resilience and geographical distance of Indonesia . . .
. . . and is dependent on allies that are either threatened by China or are embroiled in other domestic and geopolitical concerns . . .
. . . could very well become low-hanging fruit for a display of Chinese political power. Not so much for international consumption, but for the benefit of the enemy that the Chinese leadership fears most: internal Chinese politics.
Panatag Shoal, also referred to as “Scarborough Shoal” or “Bajo Masinloc’, has already been under virtual Chinese control since 2012 -- thanks, in no small part to a
miscalculation during the previous administration. This involved a maritime law enforcement engagement by the BRP Gregorio del Pilar at the shoal. The use of the Philippine Navy flagship in the incident introduced a military vessel into what had been hitherto a purely coast guard affair and threatened to draw-in a military response from China. This, and the subsequent withdrawal from Scarborough by all Philippine forces -- both Philippine Navy and Philippine Coast Guard -- without a corresponding withdrawal by Chinese forces, created the situation that Secretary of National Defense Lorenzana described as “
mismanagement”.
The cold hard truth that the Duterte administration faced was that there is virtually nothing that actually prevents China from continuing its island building campaign on the shoal at our expense. In fact, such a move could remind Xi Jinping’s opponents of his ability, and willingness, to wield power.
While Duterte’s usual rhetoric equates a Chinese response to a Philippine protest with military action, this is arguably hyperbole to simplify the message for the average Filipino. In reality, China does not even need to engage in an actual shooting war to wield power over the Philippines. It could achieve the same effect by simply holding the Philippine economy hostage.
According to data compiled by the
Philippine Statistics Authority, China, combined with Hong Kong, account for 24.5% of all Philippine exports, and 18.8% of Philippine imports. More than any other country, including either Japan and the US.
From: https://psa.gov.ph/content/highlights-philippine-export-and-import-statistics-june-2017

China demonstrated their willingness to use exports as a means to express its displeasure at the Philippines during the
PH-CN Banana War. The Philippine Banana Growers and Exporters Association first sounded the alarm about China’s actions in 2012. Between 2014 and 2016, exports of the product to China dropped from $300M to under $100M.
At the start of the Duterte administration in May 2016, the Philippines launched a charm offensive aimed at reducing PH-CN tensions. What followed was a dramatic rise in banana imports. The war was over.
The relative brevity of that engagement meant that China wasn’t given reason to apply its influence over a broader swath of the Philippine economy. Nevertheless, the point had already been made. The potential for consequences was clearly there. The global nature of China’s economic reach meant that it could theoretically bleed the Philippines dry, by directing its export and import needs to other countries that were be all-too willing to increase their share of the Chinese market. Indonesia witnessed the latter when it withheld Nickel ore exports from China, and the dragon easily found replacements, discussed earlier in this article, and has since reversed its ban.