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By Manuel Mogato
MANILA (Reuters) - The Philippine military has revived plans to build new air and naval bases at Subic Bay, a former U.S. naval base that American forces could use to counter China's creeping presence in the disputed South China Sea, senior navy officials said.
The proposed bases in the Philippines, a close U.S. ally, coincides with a resurgence of U.S. warships, planes and personnel in the region as Washington turns its attention to a newly assertive China and shifts its foreign, economic and security policy towards Asia.
The bases would allow the Philippines to station warships and fighter jets just 124 nautical miles from Scarborough Shoal, a contentious area of the South China Sea now controlled by China after a tense standoff last year.
The Philippine navy, whose resources and battle capabilities are no match for China's growing naval might, has yet to formally present its 10-billion-peso ($230 million) base development plan to President Benigno Aquino.
But senior officials say they believe it has a strong chance of winning approval as Aquino seeks to upgrade the country's decrepit forces.
The Philippine Congress last year approved $1.8 billion for military modernization, with the bulk going to acquisition of ships, aircraft and equipment such as radar. The military had raised the plan in the past, but is now pushing it with more urgency following a series of naval stand-offs with China.
"The chances of this plan taking off under President Aquino are high because his administration has been very supportive in terms of equipment upgrade," said a senior military officer who asked not to be identified.
"The people around him understood our needs and more importantly, what our country is facing at this time."
Subic, a deep-water port sheltered by jungle-clad mountains 80 km (50 miles) north of Manila, has been a special economic zone since U.S. forces were evicted in 1992, ending 94 years of American military presence in the Philippines and shutting the largest U.S. military installation in Southeast Asia.
Since then, American warships and planes have been allowed to visit the Philippines for maintenance and refueling.
U.S. military "rotations" through the Philippines have become more frequent as Beijing grows more assertive in the South China Sea, a vast expanse of mineral-rich waters and vital sea lanes claimed entirely by China, Taiwan and Vietnam and in part by Malaysia, Brunei and the Philippines - one of Asia's biggest security flashpoints.
A 30-hectare (74-acre) area has been identified for the bases, which would station fighter jets and the Philippines' biggest warships that patrol the disputed sea, including two Hamilton-class cutter ships it acquired for free from the United States.
The plan has taken on added urgency since a tense two-month standoff last year between Chinese and Philippine ships at the Scarborough Shoal, which is only about 124 nautical miles off the Philippine coast. Chinese ships now control the shoal, often chasing away Filipino fishermen.
U.S. and Philippine navy ships begin war games near the shoal on Thursday.
The South China Sea dispute will again loom large over regional diplomacy next week when U.S. Secretary of State John Kerry joins his counterparts from Southeast Asian nations and China among other countries for an annual meeting in Brunei.
The Philippines plans to raise the issue of Chinese ships' "encroachment" near another disputed coral reef where Manila recently beefed up its small military presence, diplomatic sources told Reuters. China in turn has accused the Philippines of "illegal occupation" of the reef, which is a strategic gateway to an area believed to be rich in oil and natural gas.
RISE IN U.S. NAVY VISITS
When asked about the Subic plan, the Chinese Foreign Ministry urged its neighbors to push for peace.
"China urges the Philippines and regional countries to meet one another halfway, make joint efforts to maintain mutual trust between countries, make positive efforts towards regional peace and security and play a constructive role," ministry spokeswoman Hua Chunying told reporters.
There is no plan to allow the United States to rebuild its old bases, a sensitive issue in the Philippines where a nationalist backlash against the U.S. military helped lead to the 1992 closure of Subic and Clark Air Base.
New Philippine air and naval bases, however, would give visiting U.S. warships more security to launch operations in the South China Sea and elsewhere in Southeast Asia. A Visiting Forces Agreement, ratified by the Philippine Senate in 1999, allows U.S. forces full access to Philippine bases.
Roberto Garcia, chairman of the Subic Bay Metropolitan Authority (SBMA), which oversees the Subic Bay Freeport, confirmed the plan to build the new bases, saying he had shelved plans in the area for a theme park to make way for it.
"I don't see any problem if the government wants to build an air and naval base in the Freeport area," Garcia said, noting the increase in the number of U.S. military port calls to Subic.
This year alone, 72 U.S. warships and submarines visited Subic, compared with 88 for all of 2012, 54 in 2011 and 51 in 2010, according to official data.
The Philippine military also wants to revive an airstrip that once handled some of the largest military aircraft in the U.S. arsenal. The former Cubi Point Naval Air Station, carved out of a mountain adjoining Subic, served FedEx Corp cargo plans after the U.S. forces withdrew.
But FedEx ceased operations at the airstrip, now called Subic Bay International Airport, in 2009. Two senior air force officers told Reuters the military had proposed to Aquino to convert parts of the airstrip into an air base.
Another Philippine navy officer said the arrival in a few weeks of a second Hamilton-class cutter from the United States would put pressure on the navy to find a suitable port for large warships.
Since 2002, U.S. forces helping fight al Qaeda-linked Islamist militants in the southern Philippines have shared several bases with Philippine troops. U.S. Navy surveillance planes are allocated spaces in a local air force base at Clark.
"We've seen a lot of similar 'joint use' arrangement. The U.S. does not want bases, only access," a Philippine navy captain familiar with the Subic proposal told Reuters.
"We will share our bases with them and I am sure the U.S. would love them."
(Additional reporting by Greg Torode in HONG KONG and Sui-Lee Wee in BEIJING; Editing by Jason Szep, Stuart Grudgings and Nick Macfie)