Diplomatic dispute escalates as Beijing and Manila present competing narratives in the contested South China Sea.
The Philippines has criticised China’s embassy in Manila, after the diplomatic mission warned that deteriorating bilateral relations between the two countries could cost millions of jobs.
The Department of Foreign Affairs said late on Monday it took “strong exception” to the Chinese embassy’s tone, accusing Beijing’s diplomats of implying that economic cooperation could be weaponised as leverage.
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“This framing risks being perceived as coercive and undermines constructive bilateral dialogue,” the department said in a statement.
The Philippines and China have had repeated maritime confrontations in the contested South China Sea, and the latest dispute has its roots in a presentation by Commodore Jay Tarriela, a senior Philippine Coast Guard official, at an academic forum, in which he displayed a caricature of Chinese President Xi Jinping.
Beijing’s embassy in Manila demanded that Tarriela be held “accountable” for what it called “smears and slanders” – a reaction that itself provoked a sharp rebuke from the Philippine Senate.
Lawmakers passed a resolution condemning the embassy’s intervention as “improper”, declaring that Commodore Tarriela had been acting within his duties. Some senators went further, calling for the expulsion of Chinese embassy officials or the recall of Ambassador Jing Quan.
The Chinese embassy’s spokesman Ji Lingpeng subsequently issued a stark warning, saying that “any serious damage to diplomatic relations, including downgrading of those relations, would cost millions of jobs.”
In its statement, the Department of Foreign Affairs urged the Chinese embassy to “adopt a responsible and measured tone in public exchanges”. A separate statement from the department’s maritime affairs spokesman reiterated that Manila remained committed to engaging Beijing diplomatically, even as it accused China of “continued illegal, coercive, aggressive and deceptive activities” in the South China Sea.
“We are committed to managing the situation at sea peacefully,” said Deputy Assistant Secretary Rogelio Villanueva Jr.
There was no immediate comment from Beijing.
Manila-based think tank Stratbase Institute, meanwhile, dismissed the Chinese warning over job losses as “exaggerated and not supported by empirical evidence”, pointing to data suggesting China’s economic footprint in the Philippines is more limited than Beijing’s rhetoric implies.
It said official figures from the Philippine central bank show that Chinese foreign direct investment inflows reached $3.1m in the eleven months to November 2025, a decline of more than 50 percent year on year. China accounted for just 0.55 percent of total net investment inflows into the Philippines in 2024, it said.
While China has been the Philippines’ largest source of imports since 2013, the United States remains its top export market, underscoring the asymmetric nature of the trade relationship.
The latest dispute comes amid broader tensions between the Philippines and China over competing claims in the South China Sea. China has repeatedly been accused of conducting dangerous manoeuvres against Philippine vessels, deploying water cannon and obstructing resupply missions to Filipino-held outposts in disputed areas of the sea.
Beijing, in turn, accuses the Philippines of intruding on what it considers its sovereign territory.
A 2016 ruling by the Permanent Court of Arbitration in The Hague found China’s expansive claims in the South China Sea to have no legal basis under international law. Beijing has refused to recognise the ruling.
The Chinese embassy did not respond to a request for comment. Both countries observed a public holiday on Tuesday for the Lunar New Year.
