Philippines Uncovers Chinese Spy Network Tracking Military In South China Sea

By Cliff Venzon

Mar 7, 2025 (Bloomberg) —Philippine authorities have uncovered a network of hundreds of alleged Chinese spies, a senior official said, a much more extensive operation than previously disclosed that adds to tensions between the countries.

The suspected Chinese nationals operating in the Southeast Asian nation are believed to be engaged in espionage activities including cybercrimes, according to an official at the National Bureau of Investigation, who asked not to be identified because of the sensitivity of the ongoing operation. The bureau captured at least eight suspects earlier this year in the first arrests associated with the campaign and is set to apprehend eight more suspects later this month.

Officials in Manila have been ramping up counterintelligence efforts since the country’s military became the target of Chinese spy networks following a souring of relations with Beijing in recent years. The NBI official said both the US Federal Bureau of Investigation and Australian Federal Police have offered technical assistance with the recent cases of espionage.

Neither agency immediately responded to emailed requests for comment. A spokesperson for the US embassy in Manila said it won’t comment on law enforcement matters, but that it would “let the NBI’s statement stand on its own.”

Philippine military spokesperson Colonel Francel Padilla declined to comment on the specifics of the dragnet, saying that efforts to counter foreign interference involved cross-agency collaboration.

“Any form of espionage poses a serious risk to national security, particularly if it involves sensitive information, critical infrastructure, or activities that undermine Philippine sovereignty,” she said in a text message.

‘Very Disturbed’

The campaign comes as tensions have escalated over competing claims in the South China Sea, where Chinese enforcement vessels have been repeatedly accused of ramming into Philippine boats, causing injury to those on board. The NBI official said the military has become increasingly wary of an influx of Chinese nationals working in online gaming companies since then, and the possibility many could be spies.

President Ferdinand Marcos Jr. last year shut down online casinos that initially flourished under China-friendly former President Rodrigo Duterte, but thousands of Chinese workers remained in the country. Marcos, who has challenged Beijing’s sweeping maritime claims and reinforced his nation’s military alliance with the US, has said he was “very disturbed” over the increasing number of alleged Chinese spies in his country.

The Chinese embassy, contacted on Friday, referred Bloomberg News to an earlier statement saying, “We firmly oppose any baseless accusation and speculation aimed at smearing China and Chinese citizens.” The embassy also urged Chinese nationals overseas to abide by local laws and regulations.

Six Chinese nationals and two Philippine cohorts have been charged with espionage so far as part of the campaign. Deng Yuanqing, who was arrested in January with two local cohorts, is accused of using a vehicle equipped with spying devices to survey sites essential to national security.

In total, they visited over 120 locations including ports as well as military bases the US can access under a defense deal with the Philippines, according to an NBI document shown to Bloomberg News.

Tracking Ships

The accused are said to have used remote-access tools including one developed by a Chinese software firm, the NBI official said. The agency has yet to establish whether the spying activity was state-sponsored or if any breached data was relayed abroad.

Another group of five suspects was separately found to have used CCTV cameras to track movements of navy and coast guard ships bound for the South China Sea. Officials said they are affiliated with bilateral friendship organizations and have conducted medical missions involving local politicians. 

Deng’s wife denied the accusations against her husband to reporters in January. She admitted he was employed at a company involved in self-driving cars, but wasn’t sure what his job functions were. Some of those arrested have been in the Philippines since 2002, according to Manila’s immigration bureau.

The state-run Global Times ran an opinion piece last month saying the Philippines has “frequently sensationalized” the issue and called it a “propaganda campaign aimed at fostering an ‘anti-China’ atmosphere.”

The development comes after Bloomberg News reported in January that Chinese-state sponsored hackers penetrated the executive branch of the Philippine government and stole sensitive data as part of a yearslong campaign. Philippine officials have acknowledged the hacking attempts, but said no data was compromised.

“We reassure the Filipino people that the AFP remains vigilant and committed to protecting the nation from all forms of security threats,” Padilla said of the armed forces on Friday.

© 2025 Bloomberg L.P.

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