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Jeoffrey Maitem

Philippine lawmakers have voiced hope that joint oil and gas exploration deals with China could proceed amid the global energy crunch, despite a former Supreme Court justice warning that accepting Beijing’s terms would be tantamount to “suicide” for Manila.
Senate President Vicente Sotto III earlier this week backed President Ferdinand Marcos Jnr’s intention to resume talks with China on such ventures, given the impact of the Middle East conflict.
In 2023, Marcos Jnr and Chinese President Xi Jinping agreed to restart talks on joint oil and gas development, but these have stalled since then.
Sotto III on Monday said the oil exploration programme was previously proposed under former president Rodrigo Duterte.
Another Philippine lawmaker, Sherwin Gatchalian, also supported the idea and said the Philippines could tap China’s technology and experience, but stressed that safeguards should be in place to protect Manila’s interests and sovereignty.
Ser Peña-Reyes, an assistant professor of economics at Ateneo de Manila University, said there were potential benefits from such a partnership. However, any deal between the two sides could deter Manila’s energy partnerships with Japan, the United States or European firms, he added.
Reyes said such ventures, especially in disputed waters in the South China Sea, were costly and complex. As such, Chinese state-backed firms could play a role given their advanced offshore drilling technology and deep financial resources, he added.

“Partnering could reduce upfront costs and risks for the Philippines, which otherwise might struggle to fully develop these reserves alone,” Reyes said.
In 2020, then-president Duterte lifted a 2013 suspension on oil exploration to boost energy security, but talks on a joint venture with China ultimately failed over sovereignty and ownership disputes.
He later terminated joint oil and gas exploration with China shortly before his term ended in 2022, citing failure to reach an agreement that complied with the Philippine Constitution and the 2016 arbitral ruling, which invalidated Beijing’s claims in disputed waters.
Manila’s underdeveloped oil and gas reserves are located at Reed Bank, which may hold as much as 5.4 billion barrels of oil and 55.1 trillion cubic feet of natural gas, according to an estimate by the US Energy Information Administration.
China has long pushed for joint development of oil and gas resources in the South China Sea, a policy dating back to the late paramount leader Deng Xiaoping, under which Beijing and Manila would set aside sovereignty disputes in favour of economic cooperation.
Beijing, which does not recognise the South China Sea arbitration ruling, has framed such arrangements as a “win-win” approach to energy security and regional stability, while saying such activities should be conducted without prejudice to competing claims.

Who benefits more?
Edmund Tayao, a law professor at San Beda Graduate School of Law in Manila and president of the Political Economic Elemental Researchers and Strategists think tank, questioned China’s track record as a partner, particularly under the Belt and Road Initiative, which he said had fallen short of expectations.
He cited ports in Sri Lanka, Cameroon, Nigeria and Kenya that were built by Chinese firms under “onerous agreements”.
Antonio Carpio, a former Supreme Court justice, warned that accepting Beijing’s terms would be “suicide” for the Philippines, according to local media reports.
“Joint development is a trap because joint development means China owns the gas, the oil, and all the natural resources,” said Carpio, who played a key role in the Philippines’ case against China in the Permanent Court of Arbitration in The Hague, which concluded in Manila’s favour in 2016.
According to Carpio, the joint exploration could be done if Manila and Beijing were to follow the original terms of reference that former Philippine foreign secretary Teodoro Locsin Jnr signed in 2022.
Under Locsin’s terms of reference, the exploration should ensure that any joint search for resources would not violate the 2016 ruling and a 60-40 profit-sharing structure in favour of the Philippines.
Reyes said, however, that Carpio’s warning was only a worst-case scenario.
“It is accurate [only] if the deal compromises ownership or sovereignty. So the real issue is not joint development itself. It is how the agreement is written and enforced.


Curbing energy prices
Rommel Banlaoi, director of the Philippines-China Studies Centre at Diliman College and president of the Philippine Society for International Security Studies, argued that Beijing would not take advantage of any bilateral deal on oil and gas exploration, saying its focus would be on cooperation rather than a confrontation over sovereignty.
“Instead of arguing over who owns the oil resources there, we should discuss how to develop them for the benefit of Filipinos. China isn’t making a claim over that. If we develop it on our own, China would be fine with that, but it simply wants to be involved in the development,” Banlaoi said.
Banlaoi said Manila should seize the opportunity to work with Beijing, arguing that “temporary cooperation” born out of an energy crisis without sustained political sincerity would not succeed. Joint exploration could offer a path to shared security and prosperity while helping the Philippines meet its growing energy needs, he added.
Despite his scepticism, Tayao said that if both countries could extract oil, it would benefit the Philippines, provided that the share in production was equitable.
“If we get substantial oil from the project, assuming that oil can be processed for consumer use or at least for our national grid, it will lessen our dependence on imported oil and thus can result in a decrease in the pump price from which we are completely vulnerable now,” he said.
Reyes agreed, saying that managing energy costs was crucial for the Philippines even though oil and gas production would take years to be realised from the joint partnership.
“This is especially important after the depletion of fields like Malampaya. Lower import dependence will mean less exposure to global price spikes. Secondly, there could be lower electricity costs. Thirdly, there could be a stronger peso. Less spending on imported fuel could help the currency. A stronger peso can reduce inflation.”


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However, some analysts say that if both sides can agree on equitable oil and gas production, Filipinos could benefit from lower prices


However, some analysts say that if both sides can agree on equitable oil and gas production, Filipinos could benefit from lower prices.


Philippine lawmakers’ call for oil deals with China prompts warnings of ‘a trap’

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}However, some analysts say that if both sides can agree on equitable oil and gas production, Filipinos could benefit from lower prices

However, some analysts say that if both sides can agree on equitable oil and gas production, Filipinos could benefit from lower prices