The Philippines criticized China’s embassy in Manila after it warned that worsening relations could lead to millions of job losses. The Philippine Department of Foreign Affairs said it “took strong exception” to the embassy’s tone, accusing China of using economic ties as leverage. The department said, “This framing risks being perceived as coercive and undermines constructive bilateral dialogue.” The tension rose after a Philippine Coast Guard official showed a caricature of Chinese President Xi Jinping at a forum. China’s embassy called for the official to be held accountable for “smears and slanders.” The Philippine Senate defended the official, condemning the embassy’s actions as “improper,” with some senators urging expulsion of Chinese diplomats or recalling the ambassador. China’s embassy spokesman Ji Lingpeng warned, “any serious damage to diplomatic relations, including downgrading of those relations, would cost millions of jobs.” The Philippine Foreign Affairs urged China’s embassy to use a “responsible and measured tone.” Maritime affairs spokesperson Rogelio Villanueva Jr. stated Manila’s commitment to peaceful talks despite China’s “illegal, coercive, aggressive and deceptive activities” in the South China Sea. Think tank Stratbase Institute called China’s job loss warning “exaggerated,” noting Chinese investment in the Philippines dropped over 50% in 2024. China accounts for only 0.55% of total foreign investments, while the US remains the top export market. The dispute occurs amid ongoing clashes in the South China Sea, where China accuses the Philippines of entering its territory. A 2016 international ruling dismissed China’s claims, but Beijing refuses to accept it. The Chinese embassy did not comment further. Both nations observed Lunar New Year holidays on Tuesday.