Philippines Has No Alternative but Share Resources with China

President Xi Jinping, right, shakes hands with Philippines President Rodrigo Duterte as they attend the welcome ceremony at Yanqi Lake during the Belt and Road Forum, in Beijing in May. Photo: EPA

In SCMP’s article “Willingness to explore resource sharing points to cooperative future for China, the Philippines”, the writer Richard Heydarian, a Manila-based academic and author, says “peaceful dialogue over resource sharing in disputed areas could in itself contribute to improving diplomatic relations among competing neighbours.”

However, he points out the seemingly insurmountable obstacles including Philippine constitution and popular nationalism so that former Philippine President Gloria Arroyo failed in her attempt for such sharing.

Mr. Heydarian fails to see that situation is different now. Before Philippines’ failure to get its ally’s help in countering China in the Scarborough standoff and imposing Hague arbitration award, the Philippines still has the illusion that with the help from China’s rival and its long-term ally the US, it can be benefited from the resources in the disputed waters fully alone.

Now, without Chinese consent, it cannot even exploit the fish resources in the disputed waters claimed by it. It simply cannot exploit the energy resources without cooperation with China, but China has the technology, equipment, funds and military strength to exploit the resources alone without any sharing with other claimants. What if China extracts all the resources alone? No one can help the Philippines to prevent that. Neither the US, ASEAN or the permanent court of arbitration at the Hague can.

Therefore, the Philippines has no alternative but share the resources with China or it will get nothing.

Its current president Duterte is wise to see that, but his people perhaps do not realize that and would rather give China the opportunity to enjoy the resources entirely alone.

Comment by Chan Kai Yee on SCMP’s article, full text of which can be found at


Philippines says China agrees on no new expansion in South China Sea

FILE PHOTO: A Filipino soldier looks out from a boat in Philippine occupied Thitu island in disputed South China Sea, April 21, 2017. Erik De Castro

Manuel Mogato August 15, 2017 / 5:39 PM

MANILA (Reuters) – China has assured the Philippines it will not occupy new features or territory in the South China Sea, under a new “status quo” brokered by Manila as both sides try to strengthen their relations, the Philippine defense minister said.

Philippine Foreign Secretary Alan Peter Cayetano also said the Philippines was working on a “commercial deal” with China to explore and exploit oil and gas resources in disputed areas of the South China Sea with an aim to begin drilling within a year.

The defense minister, Delfin Lorenzana, told a congressional hearing the Philippines and China had reached a “modus vivendi”, or a way to get along, in the South China Sea that prohibits new occupation of islands.

“The Chinese will not occupy new features in the South China Sea nor they are going to build structures in Scarborough Shoal,” Lorenzana told lawmakers late on Monday, referring to a prime fishing ground close to the Philippines that China blockaded from 2012 to 2016.

China claims almost the entire South China Sea, a waterway through which about $3 trillion worth of sea-borne trade passes every year. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have conflicting claims in the area.

Philippine President Rodrigo Duterte, who took office in June last year, has courted China and avoided rows over maritime sovereignty that dogged his predecessors, while berating traditional ally the United States over several issues.

China has built seven islands upon reefs in disputed areas, three of which, experts say, are capable of accommodating fighter jets. They have runways, radars and surface-to-air missiles which China says are for defense.

Lorenzana did not comment when lawmakers, citing reports from the military, told him five Chinese ships had showed up almost 5 km off the Philippine-held Thitu Island in the Spratly archipelago on Saturday.

The military’s public affairs chief, Colonel Edgard Arevalo, declined to comment until the armed forces had the “whole picture on the current situation”.

China’s foreign ministry did not immediately respond to a request for comment.


FILE PHOTO: An aerial view of uninhabited island of Spratlys in the disputed South China Sea, April 21, 2017. REUTERS/Erik De Castro

Cayetano assured lawmakers on Tuesday any energy deal with China would not violate the constitution and would conform to a 60-40 percent revenue sharing, weighted towards the Philippines.

“We can come up with a commercial deal that is better than Malampaya in the disputed areas,” Cayetano said, referring to an existing natural gas project off Palawan island between the government and Chevron, a resource which is due to be depleted by 2024.

“How can any Filipino argue with that? … It cannot violate the constitution.”

But such an arrangement could be complex and sensitive as both countries claim the oil and gas reserves. Sharing them could be construed as legitimizing the other’s claim, or even ceding sovereignty.

The Permanent Court of Arbitration in The Hague invalidated China’s claim over most of the South China Sea in July last year. China has refused to recognize the ruling, which clarified Philippine sovereign rights to energy reserves within its 200-mile Exclusive Economic Zone (EEZ).

The Philippine energy department last month said it may resume drilling for oil and gas on the Reed Bank, which is within the Philippine EEZ, before the end of the year, offering new blocks to investors in a bidding in December.

The Philippines suspended exploration in the Reed Bank in late 2014 as it pursued the international arbitration.

Minority lawmakers Gary Alejano and Edcel Lagman opposed the plan for an energy deal saying it would be illegal.

“This is contrary to our constitution because these areas should be exclusively for Filipinos,” Lagman said.

Cayetano declined to give details of the talks and requested an executive session of congress to divulge information about the venture with a Chinese energy company, which he did not identify.

Manuel Pangilinan, chairman of Philippine oil and gas firm PXP Energy Corp, said this month any joint venture would likely be with “a company like CNOOC”, referring to the China National Offshore Oil Corp

Officials from the foreign and energy ministries have said privately any deal would likely be commercial only and both sides would keep the issue of sovereignty out of the equation to avoid complications.

Additional reporting by Ben Blanchard in BEIJING; Editing by Martin Petty, Robert Birsel

Source: Reuters “Philippines says China agrees on no new expansion in South China Sea”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


FILE PHOTO: An aerial view of uninhabited island of Spratlys in the disputed South China Sea, April 21, 2017. Erik De Castro

Philippines says China wanted non-legally binding South China Sea code

Philippine Foreign Secretary Alan Peter Cayetano speaks during the closing ceremony of the 50th Association of Southeast Asia Nations (ASEAN) Regional Forum (ARF) in Manila, Philippines August 8, 2017. REUTERS/Erik De Castro

Manuel Mogato August 8, 2017 / 9:56 PM

MANILA (Reuters) – China pushed for a maritime code of conduct with Southeast Asian countries that would not be legally binding, the Philippine foreign minister said on Tuesday.

Alan Peter Cayetano said some countries wanted the South China Sea code to be legally binding, and China preferred the less forceful “binding”. He said all parties realized it was better to drop all mention of it from the framework and move forward.

The Association of South East Asian Nations (ASEAN) and China hailed the adoption on Sunday of a negotiating framework for the code of conduct (COC) as progress towards preventing disputes.

Cayetano cited the framework as an example of how parties that were historically at odds were co-operating, but his comments indicate that China had initially set out to create a code that had no legal binds.

“Everyone is more open to negotiations,” Cayetano told a news conference. “At first, words about being non-legally binding, China dropped, just said ‘OK, approve the framework and go to the COC’.”

Critics say Beijing’s end game is to either negotiate what amounts to a gentleman’s agreement, or stall and buy time to expand its defense capability on its manmade islands.

ASEAN has long wanted to sign China up to a set of laws to prevent disputes over energy reserves, fishing, and land reclamation, and avoid military conflicts in the South China Sea, where Taiwan, Vietnam, Brunei, Malaysia, the Philippines and China have competing claims.

ASEAN and China say the framework is only a guide for how the code will be established, but critics say the failure to outline as an initial objective the need to make it legally binding and enforceable creates doubts about how effective the pact can be.
Australia, Japan and the United States on Monday urged ASEAN and China to ensure the code is “legally binding, meaningful, effective, and consistent with international law”.

China’s Foreign Minister Wang Yi on Sunday said it was too soon to discuss components of the code, but whatever is agreed must be stuck to.

“If China is saying now that we’re going for ‘binding’, will we stop talking to them?” Cayetano asked.

“The problem with legally binding is … what are the penalties, what are the mechanisms for adjudication, what tribunal, what court and who will enforce?.

“I think some countries are just being practical.”

How to address Beijing’s assertiveness in the South China Sea has long been ASEAN’s most divisive issue, with China’s influence on the group looming large and complicating efforts to reach consensus decisions.

China is particularly sensitive to even oblique references in ASEAN statements to its artificial islands and rapid development of defense facilities in disputed waters.

Host the Philippines, which is expanding its economic ties with China, made no mention of those in its chairman’s statement on the 27-nation ASEAN Regional Forum issued late on Tuesday.

Reporting by Manuel Mogato; Writing by Martin Petty; Editing by Neil Fullick and Alister Doyle

Source: Reuters “Philippines says China wanted non-legally binding South China Sea code”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

With Philippines Seeking Détente, China Prevails in South China Sea

Philippine Finance Secretary Carlos Dominguez says the Philippines is not giving up its claims but seeking a way to become a peaceful neighbour with China. Photo: Xiaomei Chen

SCMP says in its report “No South China Sea trade-off for economic gains, Philippines says”:

Manila pursues twin track with Beijing, separating maritime disputes from finance and trade ties

Manila is unlikely to compromise on its maritime sovereignty despite Beijing’s chequebook diplomacy and economic inducements, according to the Philippines’ finance chief.

In an exclusive interview with the South China Morning Post, Philippine Secretary of Finance Carlos Dominguez said Manila was trying to protect its interests by separating maritime disputes from its efforts to woo Chinese investment.

Putting aside the dispute and conducting win-win cooperation in resource exploitation is precisely what China wants so that what Manila has been doing precisely plays into China’s hands.

SCMP says that other claimants especially Vietnam is unhappy, but what can they do?

With China’s strong military and artificial islands and the US unwilling to fight China for other claimants’ interests the South China Sea is already China’ lake. Other claimants can do nothing even if China wants to have all the resources there alone. They must regard themselves as lucky that China is willing to share as China has a tradition of being friendly to its neighbors.

Be realistic to cooperate with China. There is no other ways out for other claimants as the US is unwilling and unable to fight for them.

If China has grown even stronger and the US continues its decline, they may even lose the chance to have a share of the resources in the South China Sea. No one can ensure that China’s future leaders will continue Chinese current leaders’ policy of détente.

What if Chinese military drives away all other claimants from the islands and reefs claimed by China as its territories but occupied by others? What if China conducts resource exploitation alone with the technology and equipment other claimants cannot afford and with the protection of Chinese navy and air force?

Think about that.

Comment by Chan Kai Yee on SCMP’s report, full text of which can be found at

Share Resources with China in Disputed Waters or Let China Have All

Yoshihide Suga, speaking on behalf of the Japanese government, described China’s actions as ‘extremely regrettable’. Photo: Reuters

Philippine President Duterte is wise to accept China’s offer to conduct win-win cooperation in exploiting the rich energy resources in disputed waters.

His predecessor former President Aquino tried to get the resources alone not only he energy but also the fishing resources. He sent Philippine navy to round up Chinese fishing boats in order to prohibit Chinese fishing in the disputed Scarborough Shoal and thus gave rise to a standoff with China.

Aquino thought that Philippines’ ally the US would have sent its powerful navy to drive away Chinese warships since what he did was helping the US contain China, which was precisely the aim of US President Obama’s pivot to Asia. Unfortunately for him, the US would fight for the Philippines. Instead, it told Aquino to withdraw and seek remedy from an arbitration.

Aquino did get a favorable arbitration award that completely deny China’s historical sovereignty and rights and uphold Philippines rights to the area it claims as its special economic zonearea. However the arbitration court is not a UN agency. It award has no binding force unlike the verdict of the International Court, a UN agency.

Moreover, even if Aquino had got a favorable verdict from the International Court, he could have sought remedy at the UN Security Council. However, as China has veto power there, Aquino could not have got anything even if he had been able to obtain such a verdict.

Aquino’s successor President Duterte was soon able to make a clear analysis of the situation. Since China will fight to protect its sovereignty and rights to the disputed waters and the US is unwilling to fight to help the Philippines impose the arbitration award, the only way out for the Philippines is to recover Aquino’s predecessors’ friendship with China and begin cooperation with China in exploiting the resources in the disputed waters.

China is growing increasingly strong while the US is declining. If China has overwhelming superiority to the US and a future Chinese leader refuses to share the natural resources with the Philippines, the Philippines will get nothing.

After all China has the technology and equipment to exploit the energy resources there while the Philippines has none. It has to draw in a foreign partner to exploit the resources but who would like to take the risk to upset China when China has become that extremely strong?

SCMP’s report “Beijing defends East China Sea activities after Japan protests” yesterday proves Duterte’s wisdom.

SCMP says that China is busy conducting exploration of energy resources in the area that claimed by both China and Japan. Japan protests but China simply ignore the protest and insists that the area is indisputably under China’s jurisdiction.

What can Japan do? Nothing except protesting. The US is Japan’s ally with relations much closer than with the Philippines would not send its navy to help Japan in its confrontation with China. Therefore, if Japan is not willing to conduct win-win cooperation with China in exploiting the resources, it can only watch helplessly till China has exploited all the energy resources there.

Comment by Chan Kai Yee on SCMP’s report, full text of which can be found at

China backs joint energy development with Philippines in disputed sea

Philippine Foreign Affairs Secretary Alan Peter Cayetano (R) shakes hands with China’s Foreign Minister Wang Yi in Taguig, Metro Manila, Philippines July 25, 2017. Photo: Erik De Castro

Manuel Mogato July 25, 2017 / 5:32 PM / 14 hours ago

MANILA (Reuters) – China’s foreign minister on Tuesday said he supported the idea of joint energy ventures with the Philippines in the disputed South China Sea, warning that unilateral action could cause problems and damage both sides.

Wang Yi, on a two-day visit to Manila, made the remarks after President Rodrigo Duterte on Monday said a partner had been found to develop oil fields and exploration and exploitation would restart this year.

Duterte did not identify the partner. The energy ministry on July 12 said drilling at the Reed Bank, suspended in 2014, might resume before year-end, and the government was preparing to offer new blocks to investors in bidding in December.

“In waters where there are overlapping maritime rights and interests, if one party goes for unilateral development, and the other party takes the same action, that might complicate the situation at sea,” Wang told a news conference.

“That might lead to tension, and as the end result, nobody would be able to develop resources.”

The Philippines suspended energy activities while awaiting a ruling in a case by the Permanent Court of Arbitration in the Hague. When it ruled a year ago, the court invalidated China’s claim to sovereignty over most of the South China Sea, through which more than $5 trillion of seaborne goods passes each year.

Beijing’s harassment of a survey ship of an Anglo-Filipino consortium in the Reed Bank in 2011 and its control of Scarborough Shoal in 2012 were among the reasons Manila filed the arbitration case, which China refuses to recognize.

The tribunal clarified Philippine sovereign rights to access offshore oil and gas its 200-mile Exclusive Economic Zone (EEZ), within which the Reed Bank is located.

The Philippines relies overwhelmingly on imports to fuel its fast-growing economy and needs to develop indigenous energy resources. Its main source of natural gas, the Malampaya field near the disputed waters, will be depleted within a decade.

Philippine Foreign Secretary Alan Peter Cayetano said the proposal to jointly develop resources in the disputed waters began in 1986, but the two countries “had not found wisdom to be able to push through to the next step”.

Experts say setting up such an arrangement would be extremely complex and politically sensitive. Both countries claim the oil and gas reserves, and a deal on sharing could be seen as legitimizing the other side’s claim, or giving away sovereign territory.

Wang also said China and Southeast Asian countries were firming up a maritime code of conduct framework, showing the world they could handle differences.

However, in a veiled reference to the United States, he said it was important for regional friends to stand up to outside interference.

“If there are still some non-regional forces in the region, they don’t want to see stability and want to stir up trouble, we need to stand together and say ‘No’ to them together,” he said.

In the latest confrontation, Chinese fighter jets intercepted a U.S. Navy surveillance plane over the East China Sea at the weekend, according to U.S. officials.

Editing by Martin Petty and Clarence Fernandez

Source: Reuters “China backs joint energy development with Philippines in disputed sea”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

Asserting sovereignty, Indonesia renames part of South China Sea

Indonesia’s Deputy Minister for Maritime Affairs Arif Havas Oegroseno points at the location of North Natuna Sea on a new map of Indonesia during talks with reporters in Jakarta, Indonesia, July 14, 2017. Photo: Beawiharta

Tom Allard and Bernadette Christina Munthe July 14, 2017

JAKARTA (Reuters) – Indonesia renamed the northern reaches of its exclusive economic zone in the South China Sea as the North Natuna Sea on Friday, the latest act of resistance by Southeast Asian nations to China’s territorial ambitions in the maritime region.

Seen by analysts as an assertion of Indonesian sovereignty, part of the renamed sea is claimed by China under its contentious maritime boundary, known as the ‘nine-dash line’, that encompasses most of the resource-rich sea.

Several Southeast Asian states dispute China’s territorial claims and are competing with China to exploit the South China Sea’s abundant hydrocarbon and fishing resources. China has raised the ante by deploying military assets on artificial islands constructed on shoals and reefs in disputed parts of the sea.

Indonesia insists it’s a non-claimant state in the South China Sea dispute but has clashed with China over fishing rights around the Natuna Islands, detaining Chinese fishermen and expanding its military presence in the area over the past 18 months.

Unveiling the new official map, the deputy of maritime sovereignty at the Ministry of Maritime Affairs, Arif Havas Oegroseno, noted the northern side of its exclusive economic zone was the site of oil and gas activity.

“We want to update the naming of the sea [and] we gave a new name in line with the usual practice: the North Natuna Sea,” he told reporters.

In Beijing, Chinese Foreign Ministry spokesman Geng Shuang said he didn’t know anything about the details of the issue, but said the name South China Sea had broad international recognition and clear geographic limits.

“Certain countries’ so-called renaming is totally meaningless,” he told a daily news briefing. “We hope the relevant country can meet China halfway and properly maintain the present good situation in the South China Sea region, which has not come easily.”

‘Clear Message’

I Made Andi Arsana, an expert on the Law of the Sea from Indonesia’s Universitas Gadjah Mada, said the renaming carried no legal force but was a political and diplomatic statement.

“It will be seen as a big step by Indonesia to state its sovereignty,” he told Reuters. “It will send a clear message, both to the Indonesian people and diplomatically speaking.”

Euan Graham, director of the international security program at the Lowy Institute, said Indonesia’s action followed renewed resistance to Chinese territorial claims by other Southeast Asian states.

“This will be noticed in Beijing,” he said.

Last week, Vietnam extended an Indian oil concession off its coast while a joint venture led by state-owned PetroVietnam commenced drilling further south. China has a territorial claim in both areas.

Meanwhile, the director of the Philippines Energy Resource Development Bureau, Ismael Ocampo, said on Wednesday that the country could lift a suspension on oil and gas drilling on the Reed Bank by December. The underwater mountain, lying 85 nautical miles off the Philippines coast, is also claimed by China.

Exploration activity was suspended in late 2014 as the Philippines sought an international ruling on China’s territorial claim. The Philippines won the case in the Permanent Court of Arbitration in the Hague one year ago.

China refused to recognize the decision. Philippines President Rodrigo Duterte, who took office on June 30 last year, expressed reluctance about enforcing the decision at the time, as he sought deeper diplomatic and economic ties with China.

However, the Philippines lately has become more assertive about its sovereignty.

More than two dozen oil, gas and coal blocks, including additional areas in disputed waters, may be offered during the December bidding, Ocampo said on Wednesday.

Reporting by Tom Allard and Bernadette Christina Munthe; Additional reporting by Ben Blanchard in Beijing; Editing by Bill Tarrant

Source: Reuters “Asserting sovereignty, Indonesia renames part of South China Sea”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.