SUBIC BAY, Philippines From his office window, Roberto Garcia watches workers repair the USS Emory S. Land, a submarine support vessel that is part of a U.S. military buildup as Washington turns its attention to fast-growing Asia and a newly assertive China.
The Philippines, Australia and other parts of the region have seen a resurgence of U.S. warships, planes and personnel since President Barack Obama announced a "pivot" in foreign, economic and security policy towards Asia late last year.
Washington insists the shift is not about containing China or a permanent return to military bases of the past. But it is sometimes tough to tell the difference at Subic Bay, a deepwater port near vital sea lanes and border disputes in the South China Sea that have raised tensions between China and Southeast Asian nations.
"Every month we have ships coming. A few weeks ago, we had the submarines, we've had the aircraft carriers," said Garcia, chairman of the Subic Bay Metropolitan Authority, which oversees an economic zone built on the former U.S. base. "They cannot find this kind of facility anywhere else in Asia."
The territorial tensions and the U.S. shift towards the region will be high on the agenda when Obama visits Southeast Asia in coming days.
The Pentagon says the United States has "no intention of re-establishing bases in the Philippines."
But activity in Subic, a breezy coastal city about 80 km (50 miles) north of Manila that has the feel of a tidy American suburb with shopping malls, fast-food outlets and well-lit streets, resembles a buildup.
As of October, 70 U.S. Navy ships had passed through Subic, more than the 55 in 2011 and the 51 in 2010. The Pentagon says more than 100 U.S. planes stop over each month at Clark, another former U.S. base located between Manila and Subic.
"It's like leasing a car as opposed to buying it - all the advantages of ownership with a reduced risk," said James Hardy, Asia-Pacific editor of IHS Jane's Defence Weekly.
"If you look at Subic, the U.S. will be leveraging Philippine bases and assets, privately owned assets, and all at a fraction of the monetary and political price of taking back ownership of the base. It gives the U.S. the same strategic reach that basing would have done but without all the hassle."
U.S. forces were evicted from Subic and Clark, the last and largest of their bases in the Philippines, in 1992. They revived close ties from 2000 with war games, frequent visits and by helping against communist and Muslim insurgents.
Emphasising Subic's renewed role , South Korea's Hanjin Heavy Industries, which has invested $2 billion in the port's shipyards, signed an agreement this spring with AMSEC, a unit of Pentagon contractor Huntington Ingalls Industries, to set up a maintenance and logistics hub to serve U.S. warships.
As a Pacific power, the United States has an interest in freedom of navigation, stability, respect for international law and unimpeded, lawful commerce across sea lanes, said Major Catherine Wilkinson, a Pentagon spokeswoman.
"Our military presence in the region helps to maintain peace and prosperity in the Asia-Pacific," she told Reuters.
CHINA IS NOT CONVINCED
Obama's trip for the East Asia summit in Cambodia, along with visits to Thailand and Myanmar, comes just two weeks after his re-election. Secretary of State Hillary Clinton and Defense Secretary Leon Panetta - together and separately - are visiting Australia, Singapore, Thailand, Myanmar and Cambodia this week.
"There is a very clear determination to underscore that this is a significant feature of American foreign policy," a senior State Department official said on Clinton's plane. "We want to work with China. We recognise that the Asia-Pacific region is big enough for the both of us."
Wary of Washington's intentions, China is building up its own military and pushing its sovereignty claims in the region. China, in the midst of a once-a-decade leadership change, views the U.S. pivot as emboldening Japan, Vietnam, the Philippines, Taiwan and others in territorial disputes.
"Unsurprisingly, the hawks in the Chinese military have the full attention of the leadership and have received a funding boost," Lanxin Xiang, a history and politics professor at the Graduate Institute of International Studies in Geneva, wrote in the latest issue of Survival: Global Politics and Strategy.
By 2020, the Pentagon expects to have 60 percent of its naval assets in Asia, up from about 50 percent now. Analysts say they have no details yet of troop numbers but there will be some realignment from bases in Japan and from the war in Afghanistan.
As part of the shift, the U.S. military is now rotating the first of up to 2,500 Marines through northern Australia for training and will have up to four Littoral Combat Ships calling in and out of Singapore from next year.
"There is no basing. Let's underline that," Australia's Foreign Minister Bob Carr said this month. "The Americans don't seek it and we wouldn't agree to it."
The United States already has strategic joint operations in Australia, built and funded by Washington, that include signals intelligence and satellite communications facilities. U.S. ships and planes visit Australian bases on the western and northern coasts to resupply.
The Pentagon also has its eye on Vietnam's Cam Ranh Bay, an important deepwater port for French, Japanese, American and Soviet forces during the last century. In June, Panetta became the first U.S. defence secretary to visit Cam Ranh since the end of the Vietnam War and said access for U.S. ships was "a key component" of relations with Hanoi.
Despite being at odds with China over the South China Sea, Vietnam shows little sign of going further than the maintenance and cargo operations it now allows U.S. ships at the facility.
"Vietnam does not cooperate with foreign countries to use Cam Ranh port for military purposes," Luong Thanh Nghi, the foreign ministry spokesman, told Reuters.
BALANCE OF POWER
Hardy said there was no real need for the United States to have conventional forces in Europe now, so it made sense to look to the Asia-Pacific region as a major area of operations, along with the Middle East.
"The U.S. is rebalancing for very clear reasons - the 21st century is going to be the Asian century - and it has a lot to gain from being engaged and more to lose by not being engaged," he said. "Chinese missteps in the past two years have opened the door for the U.S."
For the Philippines, the greater U.S. presence gives its woefully equipped air force and navy implied cover as tensions simmer with China and other rivals in the South China Sea, along with time for the military to modernise maritime capabilities and coastal radar systems - with U.S. help.
It is also good for the economy. More visits by U.S. sailors and pilots mean more jobs and money for shops, restaurants, bars, suppliers and contractors around Clark and Subic.
"It's a very welcome thing," said Vic Vizcocho, publisher of the Subic Bay News. "If there's going to be opposition, it will be very small and more from outside the area."
The last three U.S. ships to visit brought in $5 million in business, said Garcia, whose office and desk were used by the U.S. admiral who ran the 7th Fleet when it was based at Subic.
Still, the influx is a mixed blessing.
The U.S. Navy pays no docking fees and Garcia's plans to convert Subic's seaside airport into a resort and casino complex - modelled on Singapore's Sentosa island - may be dashed as the Philippine air force wants it for a base.
If that happens, the U.S. air force would have staging and servicing spots in the northern Philippines at Clark and Subic. It has also used the small airport on Batanes island, one of the most northerly points in the Philippines, to refuel between Japan and the Diego Garcia base in the Indian Ocean.
Philippine diplomats say Washington is seeking access to an even wider range of ports and airports, including Laoag in the far northwest, which looks across the South China Sea and is only about 800 km (500 miles) from the Chinese coast.
Garcia said he expects the situation in the South China Sea to be resolved but the United States to play an ever bigger role in the Philippines and the region.
"The tensions will lessen because the world cannot afford to get into a dispute over territories," he said. "But that doesn't mean the presence will reduce. Always you have to talk about a balance of power." (Additional reporting by David Alexander and David Brunnstrom in WASHINGTON, Rob Taylor in SYDNEY and Ho Binh Minh in HANOI: Editing by Neil Fullick)
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