Beyond security, France VFA brings economic dividends
On March 26, the Philippines and France, represented by Defense Secretary Gilbert Teodoro Jr. and French Armed Forces Minister Catherine Vautrin, signed a Visiting Forces Agreement during their bilateral meeting in Paris.
This makes France the first European nation to have such a defense agreement with the Philippines. We also have VFAs with the United States, Japan, Australia, and New Zealand. As with any VFA, the Status of Visiting Forces Agreement with France allows Filipino and French military personnel to conduct joint activities. They will also have greater cooperation in training, exercises, and other operations.
During the signing, both countries affirmed their commitment to international law. They called for the peaceful resolution of disputes and the strengthening of supply chain resilience at times of crisis.
To be sure, the VFA is not an isolated development. It is rather a natural progression of already-robust defense ties between the Philippines and France. Over the years, both countries have sustained regular engagements through military dialogues, delegation exchanges, educational programs, port calls, and joint naval and disaster response training.
In fact, long before the VFA signing, France had been expanding its military presence in the region. This includes the deployment of the Pegase Mission—which projected French air power across the Indo-Pacific—as well as the deployment of the Charles de Gaulle strike group. These initiatives demonstrate France’s commitment to maintaining a rules-based order and its willingness to operate alongside regional partners like the Philippines.
This development comes at a good time. Just this week, the Chinese fired flares at an unarmed aircraft of the Philippine Coast Guard. The aircraft was patrolling the West Philippine Sea, specifically the area of Panganiban (Mischief) Reef and Zamora Reef. The PCG called the act a clear and deliberate act of bullying.
Then again, this is only the latest act in a string of aggressive acts over the past few years, notwithstanding the ruling of the Permanent Court of Arbitration in 2016. China has been conducting its activities in defiance of this decision and of international law in general.
Amid this backdrop, the VFA with France provides a strategic security boost. It is an assurance that friends who profess the same values and commitments will be there to provide the necessary help so that we can boost our own defense profile and better assert our sovereign rights.
**
But the VFA is a milestone in other ways. More than a security arrangement, the agreement signals a broader opportunity —one that links national defense with economic security and long-term modernization.
The economic impact of VFAs could be both tangible and immediate. Specifically, the presence of foreign troops participating in joint exercises translates directly into increased local spending. Experiences from exercises such as Balikatan show that visiting personnel spend on accommodation, dining, transportation, and other services.
Thus, local businesses—especially restaurants, hotels, and small enterprises—see a noticeable boost in customers and sales due to the increased demand generated by the joint military activities.
With French forces now able to participate more regularly under the VFA framework, similar economic activity can be expected across host communities in the Philippines.
But beyond short-term consumption, the VFA could also contribute to a more stable and predictable security environment. This is critical in shaping investor confidence.
A country perceived as secure and capable of defending its interests is more attractive to foreign investors. By expanding its network of defense partnerships, the Philippines signals its commitment to stability in an increasingly uncertain geopolitical environment. This enhanced security posture reduces risk perceptions and creates conditions more conducive to long-term investments.
In this sense, the VFA is not just a military agreement—it is an economic enabler. Greater investor confidence can translate into increased capital inflows, job creation, and ultimately, improvements in the quality of life for Filipinos.
The agreement also opens new avenues for defense modernization. France has a proven track record as a reliable partner in military capability development, particularly in areas such as technology transfer, local production, and capacity building. As defense ties deepen, there is strong potential for French defense firms to establish a presence in the Philippines. This could accelerate the development of a domestic defense industry—an important pillar of long-term national security.
The joint activities and exercises can create demand for a wide range of goods and services: ammunition, military equipment, maintenance and repair, logistics support, and construction services. Philippine businesses are well-positioned to meet these needs. As participation in exercises grows, so does the opportunity for local industries.
Finally, the VFA could also serve as a catalyst for infrastructure development, which is crucial to any nation’s progress. To effectively host modern military assets and support joint operations, the Philippines will need to invest in upgrading key facilities such as ports, airfields, and logistics hubs.
Indeed, better ports facilitate trade, upgraded airfields improve connectivity, and modern logistics systems strengthen supply chains. In this way, defense-driven infrastructure investments can generate broad-based economic dividends for communities and for the country in general.
The Philippines–France VFA illustrates a broader strategic reality: security and economic development are deeply interconnected. By strengthening defense partnerships, the Philippines is not only enhancing its deterrence capabilities but also laying the groundwork for economic growth, industrial development, and infrastructure modernization.
As Manila continues to expand its network of like-minded partners, agreements like this will play an increasingly important role—not just in safeguarding sovereignty, but in shaping a more resilient, prosperous, and future-ready Philippine economy.
--
Rupert Paul Manhit is the COO and managing director of think tank Stratbase Group. He is the executive director of Philippine Trade Foundation (Phils Inc.)
- Latest
