On May 27, during the Philippine Economic Briefing in Pasay City, Ramon Ang, president and vice chairman of San Miguel, one of the oldest conglomerates in the Philippines, said the Philippine, which is facing up to a powerful China, should not give up its sovereignty in the disputed South China Sea, given the region’s vast energy resources, The Business Times reported.
China claims almost the entire South China Sea, notwithstanding a 2016 decision by the Permanent Court of Arbitration that ruled Beijing’s sweeping claims had no legal grounds. The South China Sea is rich in oil and gas, fish and has one of the busiest shipping lanes in the world. An estimated US$3.37 trillion worth of global trade passes through the South China Sea annually, which accounts for a third of the global maritime trade. 80 percent of China’s energy imports and 39.5 percent of China’s total trade passes through the South China Sea.
In recent months, there were numerous confrontations between the Philippines and China, primarily at the Second Thomas Shoal, home to a small number of Filipino soldiers based on a warship that Manila grounded in 1999 to assert its sovereignty claims. Notably, Chinese ships were using water cannons against Filipino boats.
Ang said there is a big natural gas reserve in the West Philippine Sea and the country should protect and develop it, adding that this would help reduce energy prices for struggling Filipinos. For example, he said Malaysia subsidizes oil prices as it has its own oil reserve, which generates an average of one million barrels a day, compares to the Philippines’ 6,000 barrels per day.
West Philippine Sea is the official designation by the government of the Philippines to the parts of the South China Sea that are included in the country’s exclusive economic zone.
Following Ang’s remarks, Arsenio Balisacan, the secretary of the National Economic and Development Authority, pointed out that the government’s approach is not to subsidize fuels, power or electricity as the biggest consumers are the rich. He added that the Philippines experienced “a lot of fiscal problems” when it unveiled the “Oil Price Stabilization Fund” in 1984 under the administration of former president Ferdinand Marcos Sr., the father of the current president.
Although some analysts concurred that the present moment was the best time to “quickly develop” the resources in the South China Sea, others cautioned that “political considerations” must be taken into account first, in wake of China’s increasingly aggressive actions towards the Philippines.
As both countries are embroiled in this long-standing tension over territorial disputes in the South China Sea, Manila-listed PXP Energy is prevented from exploring the Reed Bank in the South China Sea, chairman Manuel Pangilinan said to The Business Times.
Under the administration of President Ferdinand Marcos Jr, the Philippines has been more assertive in staking its claims in the resource-rich South China Sea, standing up to Beijing’s wide-ranging claims. In May, the Department of Foreign Affairs protested against China’s unilateral four-month fishing ban in the South China Sea, scheduled to last until mid-September.
The Philippines is hoping to leverage security ties with the U.S. for wide economic benefits, relying on allies to play a vital role in exploring and developing energy resources in the disputed South China Sea. The Philippines and U.S. are allies, having signed the 1951 United States-Philippines Mutual Defense Treaty, which requires both countries to support each other if another party attacks. U.S. officials, including the president, have said the treaty extends to armed attacks on Philippine armed forces, public vessels, or aircraft, including those of its Coast Guard, anywhere in the South China Sea.
During an interview with the Japanese media last December, Marcos Jr. said animosities in the South China Sea have “increased rather than diminished” in recent months, admitting that a “more assertive China” posed a “real challenge” to surrounding countries. He added that his administration is working to address “exploration issues” in the South China Sea, so as to start new projects in the disputed area to meet energy needs.
Photo credit: iStock/ jennagenio
