Joint exploration deal more favorable to China than PHL – analyst

WASHINGTON – An influential defense think-tank warned against the planned joint exploration between the Philippines and China in the South China Sea, saying it would not work due to sovereignty issues.

“The cost are you are no longer stating unambiguously that this territory is that of the Philippines and that’s what is troubling to me about it,” said Derek Grossman, a senior defense analyst at the RAND Corporation.

Manila and Beijing were looking to jointly explore for oil and gas in still undetermined areas in the West Philippine Sea, which may include the Reed Bank, a resource-rich area within the Philippines Exclusive Economic Zone, but being claimed by China.

Last August, both sides signed a joint Terms of Reference that outlined arrangements on how talks would be conducted on the possibility of having an energy cooperation deal. Part of this is the creation of a steering committee to oversee the negotiations.

The committee met in Beijing in October, but no specific details were agreed upon.

“Joint exploration for energy resources is probably not gonna work out. It will be on Beijing’s terms if anything,” Grossman said.

“They tell you when, where and how to do it. It’s not gonna eventually lead to more Philippine sovereignty.”

Locally known as Recto Bank, Reed Bank was declared a part of the Philippine EEZ – a body of water that covers 200 nautical miles from its shores – by the Permanent Court of Arbitration in 2016 in The Hague, Netherlands.

The arbitral tribunal also ruled that China’s massive claim in the South China Sea has no legal basis. Manila calls parts of the South China Sea that falls under its EEZ as the West Philippine Sea.

Reed Bank is vital to Philippine national interest as it is the only replacement for Malampaya, which supplies 40 percent of the energy requirement of the Luzon region.

Senior Associate Justice Antonio Carpio, one of the country’s leading maritime experts, said an oil and gas development agreement between the Philippines and China would be constitutional if Beijing participated, with the suggested 60-40 sharing in favor of Manila, through a Philippine service contract.

Grossman said the Philippines should be wary of entering any energy pact with China and must weigh its costs and the benefits.

“The benefits are trying to smooth out the relationship between China and the Philippines. The Permanent Court of Arbitration ruling in 2016 was pretty clear at least in that particular case that the Philippines had the correct argument in the South China Sea and China ignored it,” Grossman said.

“When doing joint exploration, that’s almost like a reward for something you have not received reciprocation for.” — DVM, GMA News