(Bloomberg) -- The US and the Philippines are moving to forge closer trade and investment ties amid the risk of China using its economic influence for “coercion,” according to Manila’s envoy to Washington.

The Philippines’ agricultural exports to China could be “in peril” of being cut down as tensions between the two nations in the South China Sea linger, Philippine ambassador to the US Jose Manuel Romualdez said at a diplomatic event on Wednesday.

“These are things being used by them for economic coercion — that’s always on the table,” Romualdez told reporters after the event, adding that there’s no concrete indication so far that China is resorting to such moves. “That’s why we are working double time to look at other markets,” he said.

China is the Philippines’ top trading partner, and a major export destination for its products like bananas and nickel ore. Relations between the two countries have, however, frayed in the past year as they assert their overlapping claims in the South China Sea, with their vessels clashing in disputed waters.

Amid these tensions with China, the US “is going out of its way” to expand economic relations with the Philippines, Romualdez said. He said the US trade delegation to be led by Commerce Secretary Gina Raimondo next month is only the first of many economic engagements expected to yield American investments on the Philippines’ infrastructure, manufacturing and energy sectors. 

“The US is very committed to this. They have said it on many occasions that they will do what they can to encourage investments, because they are also diversifying,” the ambassador said.

The Philippines under President Ferdinand Marcos Jr. has enhanced its longstanding security alliance with the US through a mix of military drills, joint sea patrols and an expanded defense pact, amid the US’ oft-repeated commitment that the partnership is ironclad.

Other key points from the Philippine envoy:

  • The US’ stance on the Indo-Pacific region will remain the same even if Donald Trump returns as president, Romualdez said, citing conversations with people close to the former leader.
  • The South China Sea is “the real flashpoint” in the region instead of Taiwan, as there’s a risk of an accident amid skirmishes in the contested waters. The Association of Southeast Asian Nations should help deter China’s actions in the disputed sea, he added.
  • The push to rewrite the Constitution’s economic provisions that’s being backed by Marcos could help open the Philippines to even more US investment.

(Adds key points in last section.)

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