* "Serious step with significant implications" - U.S.
* Pentagon chief calls it "unfortunate"
* Duterte can't scrap agreements himself - senators
* U.S. pacts provide training, equipment, intelligence
* Duterte seeks closer China ties
(Updates with Esper comments)
By Karen Lema, Martin Petty and Phil Stewart
MANILA/WASHINGTON, Feb 11 (Reuters) - Philippine President
Rodrigo Duterte on Tuesday announced the termination of a
two-decade-old Visiting Forces Agreement with the United States
(VFA), delivering on threats to downgrade an alliance important
to U.S. interests.
U.S. Defense Secretary Mark Esper called the decision
"unfortunate" and said it would be a move in the wrong direction
at a time when Washington and its allies were trying to press
China to abide by "international rules of order" in Asia.
The mercurial Duterte, who has clashed with the United
States over several issues, decided to pull the plug on the
troop rotation pact with the former colonial ruler to enable the
Philippines to be more independent in its relations with other
countries, his spokesman Salvador Panelo said.
"The president will not entertain any initiative coming from
the U.S. government to salvage the VFA, neither will he accept
any official invitation to visit the United States," Panelo
said.
The decision, sparked by the revocation of a U.S. visa held
by a former police chief who led Duterte's bloody war on drugs,
could complicate U.S. military interests in the Asia-Pacific
region as China's ambitions rise.
It would also limit Philippine access to U.S. training and
expertise in tackling Islamist extremism, natural disasters and
maritime security threats.
Panelo said Duterte's decision was a consequence of U.S.
legislative and executive actions that "bordered on assaulting
our sovereignty and disrespecting our judicial system".
Given the importance of the alliance with the Philippines in
broader U.S. strategy, Washington hopes the decision will be
reversed or delayed before it takes legal effect in 180 days.
Esper told reporters travelling with him to Brussels for a
NATO meeting he only received notification of the move late on
Monday.
"We have to digest it. We have to work through the policy
angles, the military angles. I'm going to hear from my
commanders. But ... in my view, it's unfortunate that they would
make this move," he said.
While he said he did not think the step was necessarily tied
to China, it was a move "in the wrong direction as we both
bilaterally with the Philippines and collectively with a number
of other partners and allies in the region are trying to say to
the Chinese 'You must obey the international rules of order...'"
SETS OUT RULES
The VFA is important to the overall U.S.-Philippines
alliance and sets out rules for U.S. soldiers to operate in the
Philippines. It underpins what Washington has called an
"ironclad" relationship despite Duterte's complaints about U.S.
hypocrisy, ill treatment and ageing weapons.
Duterte says the United States uses the pacts to conduct
clandestine activities like spying and nuclear weapons
stockpiling, which he says risk making the Philippines a target
for Chinese aggression.
Ending the VFA could hurt Washington's future interests in
maintaining an Asia-Pacific troop presence amid friction over
the presence of U.S. personnel in Japan and South Korea and
security concerns about China and North Korea.
Some Filipino senators sought to block Duterte's move soon
after news of it broke, arguing that without Senate approval he
had no right to unilaterally scrap international pacts it had
ratified.
"We must have a say on this important matter," said Senator
Richard Gordon.
Some lawmakers are concerned that without the VFA, two other
pacts would be irrelevant, namely the 2014 Enhanced Defence
Cooperation Agreement made under the Obama administration, and a
1951 Mutual Defence Treaty.
Those cover dozens of annual military training exercises and
broaden the access of U.S. forces and equipment to the
Philippines, as well as bind the two countries to defend each
other from external aggression.
Supporters of the agreements argue they have deterred
Chinese militarisation in the South China Sea and $1.3 billion
of U.S. defence assistance since 1998 has been vital in boosting
the capabilities of under-resourced Philippine forces.
Philippine nationalists, however, say the United States did
nothing to stop China building islands in the South China Sea
equipped with missiles, and say the VFA is lopsidedly favourable
to Americans, including the granting of immunity from
prosecution for U.S. servicemen.
Duterte, who favours closer ties with China and Russia,
pressed ahead with the termination despite a Senate hearing on
the VFA last week during which his senior generals and defence
and foreign ministers spoke in favour of it.