From maritime dispute to energy breakthrough

President Marcos’ most recent statement expressing openness to oil and gas cooperation with China may prove to be one of the most consequential policy signals of his presidency. His remarks touch on a strategic challenge that can no longer be ignored: the Philippines’ growing energy vulnerability.

For years, discussions about the South China Sea have focused almost exclusively on sovereignty, maritime rights, and security. These issues remain vital and nonnegotiable. Yet another critical dimension deserves equal attention: energy security.

The Philippines is becoming increasingly dependent on imported energy. While the Marcos administration has taken important steps to extend the productive life of the Malampaya gas field, policymakers understand that Malampaya alone cannot carry the country’s energy future indefinitely. This is where Reed Bank, or Recto Bank, enters the picture.

Located west of Palawan within the Philippines’ exclusive economic zone under the United Nations Convention on the Law of the Sea, Reed Bank is widely regarded as one of the country’s most promising offshore energy prospects. At the heart of Reed Bank is the Sampaguita gas field, long viewed by Philippine energy experts as a potential successor to Malampaya and a major source of domestically produced natural gas.

Yet despite its enormous potential, Reed Bank remains undeveloped. The area has become entangled in the broader maritime dispute between the Philippines and China. What should have been primarily an energy development issue has evolved into a complex legal, diplomatic, and geopolitical challenge.

This reality gives Mr. Marcos’ statement particular significance. His willingness to explore cooperation with China should not be interpreted as a retreat from Philippine sovereignty or maritime entitlements. Rather, it reflects a pragmatic recognition that energy security and diplomacy are increasingly interconnected. The Philippines can continue defending its rights in the West Philippine Sea while simultaneously exploring mechanisms that could unlock resources essential to national development.

In 2018, the Philippines and China signed a Memorandum of Understanding on oil and gas cooperation. Although subsequent negotiations failed to produce a final agreement, the initiative demonstrated that dialogue on energy development remained possible even amid unresolved maritime differences.

Around the world, states with competing maritime claims have pursued joint development arrangements without requiring either side to abandon its legal position. Such mechanisms allow parties to set aside disputes temporarily while sharing the economic benefits of resource development. Sovereignty issues are not resolved, but neither are they permitted to prevent mutually beneficial cooperation.

Developing the Reed Bank’s Sampaguita gas field could strengthen the country’s energy security, reduce vulnerability to external supply disruptions, generate government revenues, create jobs, attract investments, and support long-term economic growth. However, any arrangement involving Reed Bank must comply with the Philippine Constitution and preserve the country’s sovereign rights and jurisdiction. It must withstand legal scrutiny and command social acceptability. Given strong public sentiments regarding the West Philippine Sea, any proposal involving Chinese participation will immediately face intense examination.

Trust is another obstacle. Years of maritime incidents have generated deep skepticism among many Filipinos regarding China’s intentions in the West Philippine Sea. Without meaningful confidence-building measures, even economically advantageous proposals may struggle to gain public acceptance.

There is also the broader geopolitical environment to consider. Any decision concerning energy cooperation with China will be viewed through larger strategic lenses involving other major powers like the United States and Japan.

But the Philippines cannot afford to leave valuable indigenous energy resources permanently undeveloped. Nor can it ignore the economic consequences of increasing dependence on imported energy. Reed Bank represents one of the few opportunities available to meet the country’s long-term energy security requirements.

The task now is to determine whether Manila and Beijing possess sufficient political will, strategic patience, and diplomatic creativity to transform the Reed Bank from a source of contention into an area of practical cooperation. If managed wisely, the development of the gas field could become more than an energy project. It could become a model for advancing mutual benefits while managing enduring differences in one of Asia’s most contested maritime regions.

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Rommel C. Banlaoi, Ph.D., is director of Philippines-China Studies Center at Diliman College and president of the Philippine Society for International Security Studies.