Opinion | How China, Philippines can settle their South China Sea resource dispute and avoid conflict

A moment of truth could be approaching for the China-Philippines dispute in the South China Sea. The administration of Philippines President Ferdinand “Bongbong” Marcos Jnr is reportedly considering allowing Forum Energy to proceed with petroleum exploration on the Reed Bank.

The company has asked the government for protection against harassment by China. If provided, it could lead to a military confrontation and that could draw in the Philippines’ military ally, the United States. A way to avoid such a confrontation is through negotiating a provisional cooperative arrangement of a practical nature that satisfies both parties.

China’s “nine-dash line” claim overlaps most of the Philippines’ 200-nautical-mile exclusive economic zone. This includes the Reed Bank, which is known to contain significant gas resources. In 2018, when President Xi Jinping visited Manila, the two states signed a memorandum of understanding “to negotiate arrangements on an accelerated basis to facilitate oil and gas exploration and exploitation in relevant maritime areas”.

But negotiations were terminated at the end of Rodrigo Duterte’s presidency because, according to then-foreign minister Teodoro Locsin, “We got as far as it is constitutionally possible to go.” In other words, China wanted terms that, in the Duterte administration’s view, would violate the Philippines’ Constitution. Obviously, serious political and legal obstacles remain. What are they and how can they be overcome?

In addition to wanting to avoid further conflict, both states have good reason to be open to a cooperative solution. The Philippines must replace its main domestic supply of gas for electricity – the Malampaya gas field – which could soon run out. However, it has been reluctant to proceed unilaterally on the Reed Bank, given China’s strenuous objections.

China is also keen to conclude a cooperative agreement because it would help strengthen its relations with the Philippines. It would also serve as a precedent and template for temporary settlement of its disputes with others in the South China Sea such as Brunei, Malaysia and Vietnam. Marcos will visit China in January, when there will probably be further discussions of principles.