Philippines to begin exploration activities in oil-rich sea amidst China tension with U.S. as defense ally

Andreo Calonzo and Cliff Venzon, Bloomberg January 18, 2024

(Bloomberg) – The Philippines is building defense alliances with the U.S. and other security partners to help pave the way for resource exploration in the oil-and-gas-rich South China Sea, the nation’s top defense official said, prompting a warning from Beijing.

Gilberto Teodoro Jr. (Photographer Geric Cruz/Bloomberg)

“I really do think it’s quite urgent that we start now,” Defense Secretary Gilberto Teodoro Jr. said in an interview with Bloomberg News on Wednesday in his office in Manila. While he declined to provide details, Teodoro, 59, said that resource exploration is “part of the package” of the Philippines’ strategy in fighting for its territory.

His comments suggest that oil and gas exploration could well be the next flashpoint in the territorial disputes in South China Sea where Beijing has laid a sweeping claim opposed by countries including the Philippines and rejected by an international tribunal in 2016. The Philippines, which imports almost all its fuel requirements, has been trying to start oil and gas exploration in its territorial waters as a key local gas field nears depletion.

That bid had been largely foiled by the maritime dispute with China, which routinely deploys ships in the contested waters. Beijing’s agenda in the South China Sea may also be spurred by energy interests, according to Teodoro.

“This could mean that they really want total domination and control over everything from free passage to resources, or they want to bear hug the Philippines to make them the sole joint venture partner in the exploration or exploitation of resources in this area,” Teodoro said. “Their legal position is untenable and has been rejected by the whole world,” he said.

China’s Foreign Ministry spokesperson Mao Ning, in a briefing in Beijing on Thursday, reiterated “that the Philippines developing alliances with relevant countries should not infringe on China’s lawful rights and interests in the South China Sea.”

Philippine President Ferdinand Marcos Jr. had lately stepped up a push to end the deadlock in negotiations in South China Sea resource exploration, almost a year since he met Chinese counterpart Xi Jinping and agreed to jointly pursue discussions. Since that January 2023 meeting in Beijing, relations between the two neighbors have become rocky, marked by increasingly dangerous encounters at the sea.

The Philippines will not allow any joint exploration that doesn’t recognize the nation’s right to exclusively exploit these resources, the defense chief said. “Our role really is to secure the territorial integrity and sovereignty of the Philippines and to protect as much as we can the peaceful and unimpeded exploitation by Filipinos and legally allowable entities,” said Teodoro, a lawyer by training and a one-time presidential contender.

In the face of a “more aggressive” China, the Southeast Asian nation is also planning “more robust” military activities with the U.S. and its allies, Teodoro said, describing his nation’s alliance with America as “extremely strong.” In early 2023, the Philippines agreed to expand American access to military bases near Taiwan and the South China Sea.

The Philippines is also expanding ties with “other allies and like-minded countries” including Australia, Japan, the UK and Canada. As the U.S. heads into a crucial election in November, Teodoro hopes that Washington’s defense strategy in the Indo-Pacific will not waver.

“A lot has been invested already on both sides,” he said, referring to the US and Philippine engagements. Ensuring security in the Indo-Pacific and rights of passage in the vital trade route benefits not only the US and its allies but the entire global economy, according to the defense minister.

Tensions escalated in recent months as Philippines and Chinese ships faced off in the contested waters. Teodoro said that what worries him the most about the dispute is “the possibility of a miscalculation or a conflict.”

“You’re dealing with a country without any openness, with opaqueness, with unpredictability, with no external indicators to show what its next move will be,” he said of China. As a result, countries like the Philippines have to be prepared all the time, which Teodoro said has kept him busy “hardening and building up our alliances” in line with Marcos’s foreign policy stance.

Deeper U.S.-Philippines defense ties have drawn criticism from China, with its top diplomat warning Manila last month against colluding with “malicious external forces.”

China is hoping to meet halfway with the Philippines, Beijing’s envoy to Manila Huang Xilian separately said at an event late Wednesday in Manila. Foreign affairs officials from both countries also met in Shanghai on Wednesday and agreed to better manage the South China Sea dispute.

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