Marcos gov’t told to comply with court yardstick on future oil deals


By John Victor D. Ordoñez and Alyssa Nicole O. Tan, Reporters

PHILIPPINE President Ferdinand R. Marcos, Jr. should ensure that future deals on natural resource management with other countries follow the precedent set by the Supreme Court, which voided a 2005 oil deal with China and Vietnam, senators and political analysts said on Sunday.

“The ruling hints at constitutional guardrails that should guide future negotiations on cooperative agreements involving the West Philippine Sea and our other maritime domains,” Herman Joseph S. Kraft, a political science professor at the University of the Philippines, said in a Viber message.

President Ferdinand R. Marcos, Jr. should follow the framework set by the high tribunal’s decision, said Michael Henry Ll. Yusingco, a lawyer and policy analyst.

“It is incumbent upon the president and his team to abide by the framework set by this decision,” he said in a Facebook Messenger chat.

“The correct way to proceed with the discussions has been shown to them, so it’s only natural to expect that they will follow this consistently and faithfully.”

Senators also weighed in on the ruling, which they said does not bode well for the Marcos government’s renewed push for joint oil and gas exploration with China in the South China Sea.

“The decision becomes the minimum, the discussion point, for any joint exploration, venture, co-production or sharing,” Senator Sherwin T. Gatchalian said in a Zoom interview with BusinessWorld. “The overarching message of the Supreme Court is, it should follow our Constitution.”

The High Court last week said the 2005 deal was illegal for allowing foreigners to explore the country’s natural resources covering 142,886 square kilometers without full state supervision.

“That’s where the problem comes in,” Mr. Gatchalian said. “I’m not so optimistic about the joint exploration concept because for the past four years under the Duterte administration, they’ve been trying to find common ground to move forward, but they couldn’t.”

The government of ex-President Rodrigo R. Duterte ended exploration talks with China just before his term ended last year, citing sovereignty issues.

China on Thursday said it remained committed to pursue joint oil exploration activities in the disputed South China Sea. It would “actively explore ways for practical maritime cooperation including joint exploration,” Wang Wenbin, spokesman of China’s Ministry of Foreign Affairs, said in a statement.

The South China Sea, a key global shipping route, is subject to overlapping territorial claims involving China, Brunei, Malaysia, the Philippines, Taiwan and Vietnam. Each year, trillions of dollars of trade flow through the sea, which is also rich in fish and gas.  

“It moves the timetable back, for sure,” Senator Ana Theresia “Risa” N. Hontiveros-Baraquel said in a Viber message. “But the constitutional provision that reserves the exploration, development and utilization of natural resources to Filipino citizens, corporations or associations at least 60% of whose capital is owned by such citizens is there to ensure that the government safeguards the patrimony of our people.”

‘FOOLISH’“At the very least, this forces the government to proceed prudently by, among others, choosing its partners carefully,” she added.

Senator Francis Joseph “Chiz” G. Escudero said the High Court’s ruling “presents a huge legal obstacle to what the government plans regarding joint exploration with China.”

The Marcos government should instead focus on other sources of energy including renewable and nuclear sources amid a looming energy crisis, he said in a Viber message.

“They should begin pursuing these other sources of energy as soon as possible because it takes at least two to four years to build and put them online,” he added.

Mr. Gatchalian cautioned against changing the 1987 Constitution, which he said exists to protect the interests of Filipinos.

“This is where the complexity comes in because China is claiming the whole area, and any physical activity in that area will probably raise the eyebrows of China,” he said. “They’ll probably send some ships to prevent activities from happening.”

“We’re trying to tread it very carefully as well,” the senator said. “Unfortunately, that area is the most prolific in terms of oil and gas, but that area is also being claimed by China, and we’re quite firm that that’s ours.”

China has rejected a 2016 United Nations-backed tribunal’s ruling that voided its claim to more than 80% of the South China Sea based on a 1940s map.

The Hague-based Permanent Court of Arbitration upheld the Philippines’ rights to its exclusive economic zone within the waterway.

Exploration for new sources of gas and oil should be part of the government agenda to address energy supply issues, Senator Maria Imelda “Imee” R. Marcos said in a Viber message.

“Nonetheless, the decision will not have any immediate impact,” she said. “Oil and gas explorations, if ever they do pan out, usually take a long time to produce effects.”

Ms. Marcos, the president’s sister, said the state should continue encouraging investments in renewable energy. “The past few years have seen tremendous expansion in clean energy, particularly solar energy. We are looking at ways to encourage more investments in this sphere,” she added.

Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said the government should ensure transparency and fairness in future bilateral deals.

“The key here is the proper formulation of contracts that ensure everyone is rewarded correctly based on merit and contribution,” he said in a Messenger chat. “No untoward action that will reduce such benefits should be left unpunished.”

“It will be foolish of this administration to proceed with this initiative in any other way or manner other than what the Supreme Court has laid out in this decision,” Mr. Yusingco said.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular

Your daily news source covering investing ideas, market stocks, business, retirement tips from Wall St. to Silicon Valley.

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 TheProficientInvestor. All Rights Reserved.

To Top