Panelo: Gov't can rescind oil, gas deal if not beneficial to PHL

The Philippines can set aside the document signed by the Philippines and China aimed at looking at a possible energy cooperation in the disputed South China Sea if found not beneficial to the country, a Malacañang official said Thursday.

"Definitely. [I]n law there is such a thing as rescission of contract. If the contents of the contract does not contain the intention of the parties, you can rescind," presidential spokesperson Salvador Panelo told reporters when asked if the Philippines can walk away from the MOU if it was found detrimental to the country's interests.

Panelo, however, admitted that he has not read the memorandum of understanding on cooperation on oil and gas development which was among the 29 deals signed during the state visit of Chinese President Xi Jinping this week.

The Palace official also said it was premature to raise questions about the legality of a joint exploration deal with China because Manila and Beijing are still in the negotiation process.

"What is important is palagi ang tanong dyan, the predicate is this agreement legal as far as we are concerned under the Constitution? Number two: Is this beneficial to us? Otherwise hindi tayo papayag. Syempre palaging dapat pabor sa atin hindi lang sa kanila pabor," he said.

Panelo, who also serves as Duterte's chief legal counsel, said the two countries will enter into an agreement based on "mutual respect, mutual trust and mutual respect for sovereignty."

Disclosing the details of the MOU, Foreign Affairs Secretary Teodoro Locsin Jr. said in an in interview with CNN Philippines that both governments agreed to establish "an intergovernmental joint steering committee" to look into possible energy cooperation.

The committee, to be headed by the foreign ministries, "will be responsible for negotiating and agreeing the cooperation arrangements in maritime areas to which they will apply, and deciding the number of working groups to be established and for which part of the cooperation area each working group is established."

"Each working group will negotiate and agree on inter-entrepreneurial, technical, and commercial arrangements that will apply in the relevant working area," said Locsin.

Under the MOU, Locsin, who declared to have written the signed document, said each working group that will look into a possible exploration deal between the Philippines and China "will consist of representatives from enterprises authorized by the two governments."

The China National Offshore Oil Corporation and the Philippine National Oil Company will also be involved, according to Locsin.

Locsin said the two governments are hoping to agree on the cooperation arrangements within 12 months from the signing of the MOU.

Energy Secretary Alfonso Cusi earlier said it was imperative for the government to lift the moratorium on exploration and drilling works in the disputed areas in the South China Sea in order for the possible joint oil and gas exploration deal with China to move forward.

Panelo, in response, said it is up to the President to lift the ban.

"If the President thinks it is best suited to pursue...then he will do it. The President listens to advice, recommendations coming from members of the Cabinet, but ultimately it’s the President’s call," Panelo said. —LDF, GMA News