Nation’s Prosperity at Stake

By Erick San Juan

Malampaya

Malampaya

First year in power of the Duterte administration and one year after The Hague Permanent Court of Arbitration ruling in favor of the Philippines’ claim in the disputed area in the South China Sea, where are we now? Whether we like it or not, the bottomline here is still economics.

We are nearing the ten-year life of productivity of the Malampaya natural gas and we must look into other sources of energy to supply the growing need of the country’s populace. Economic managers and those in the energy department should have considered such important factor to make the Dutertenomics work. Although the president himself said that in time, he will talk to China’s Xi Jinping when it comes to our claim in the South China Sea which the PCA granted us. But Mr. President, we are being overtaken by events and after a year, China’s massive building of military structures are now in place in the SCS where most of our claim is located.

Unfortunately, China’s aggressiveness was based from its “systematic campaign to delegitimize the tribunal and its judges, adopting a “three-nos” policy of non-participation, non-recognition, and non-compliance with the final verdict. At the time, Beijing dismissed the award as a “null and void” decision and “nothing more than a piece of paper.”

Still, Duterte faces growing domestic pressure to adopt a tougher line with Beijing, which many believe has used cordial ties (translation-soft touch op) as cover to consolidate its control over key features. Supreme Court Justice Antonio Carpio, a prominent supporter of the arbitration strategy, lambasted the president’s supposed lack of “discernible direction, coherence, or vision” in foreign policy.

He has heavily criticized some of Duterte’s remarks, particularly his announcement that he “will set aside the arbitral ruling” in the interest of better relations with China. “This incident [Dutetre’s remark] graphically explains Philippine foreign policy on the South China Sea dispute after the arbitral ruling,” exclaimed Carpio during a high-profile event marking the arbitration award’s first anniversary.

He reiterated the importance of the ruling, since it secured “the Philippines vast maritime zone larger than the total land area of the Philippines.” Instead of setting aside the arbitration award, the magistrate called upon the government to consider filing additional arbitration cases against Beijing if the latter continues its non-compliance with the award.

Senior former government officials, including former Foreign Secretary Albert Del Rosario, who played a key role in the arbitration proceedings, have echoed similar sentiments against the president. Others have openly accused the Duterte administration of soft-pedaling territorial issues in short-sighted exchange for Chinese economic incentives.” (Source: Has Duterte’s China engagement backfired? By Richard Javad Heydarian @ Asia Times online)

We have to move fast and firm to our claim which is included in our EEZ in order to survive the years ahead for the generations to come. What is at stake to claim what is rightfully ours?

According to U.S. oilfield services company Weatherford, one concession – SC 72 – contains 2.6-8.8 trillion cubic feet of natural gas. That would be as much as triple the amount discovered at the Malampaya project, an offshore field that powers 40 percent of the main island of Luzon, home to the capital Manila.

The U.S. Energy Information Administration believes that beneath the South China Sea could be 11 billion barrels of oil, more than Mexico’s reserves, and 190 trillion cubic feet of natural gas.

Most foreign firms with capital and technology needed to develop those reserves, however, don’t want to risk being caught up in spats over jurisdiction and have avoided concessions offered in disputed waters.

Manila’s state-run Philex Petroleum (PXP.PS) has the controlling stakes in two stalled concessions, the 880,000-hectare SC-72 at the Reed Bank and the 616,000-hectare SC-75 off the island of Palawan.

The court verdict on July 12 sparked a surge in energy stocks the next day, with Philex shares up as much as 21 percent.

Philex says it is seeking a meeting with Philippine energy officials regarding the potential to lift a suspension order on drilling activities in the Reed Bank, in place since December 2014.

“It’s a matter of national importance. We don’t want to move on our own without guidance from the government,” Philex Chairman Manuel Pangilinan told reporters.

“We will need a partner … no local company has the expertise that we need.”

Department of Energy spokesman Felix William Fuentebella said there were no immediate plans to lift the suspension as the department awaited guidance from new President Rodrigo Duterte.

“The moratorium stays. We are exploring ways to resolve the conflict peacefully and we follow the lead of the President,” he said.

Manila and Beijing have both expressed a desire to resume talks, but the Philippines says it could not accept China’s pre-condition of not discussing the ruling. (Source: Philippines’ oil still in troubled waters after South China Sea ruling by Enrico Dela Cruz)

Now that President Rodrigo Duterte considers resuming energy exploration in the tension-laden South China Sea before the year ends, let us wait and see for China’s leader’s reaction. If the reason for delaying the talk with China on the arbitral ruling is economics then let it be the reason. It is still economics to assert our rights to our claim in order to develop and make Dutertenomics work.

It’s our nation’s prosperity on the line Mr. President. Your living legacy.


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