With apologies to American campaign strategist James Carville who coined the phrase “It’s the economy, stupid” during the 1992 US presidential derby, allow us a variation – albeit his original likewise applies – as an apt rejoinder to those blindly criticizing the joint Philippine-China exploration proposal over resources in the West Philippine Sea.
It was recently announced that the Philippines, in the exercise of its economic sovereignty rights, was open to a joint exploration on the basis of a 60:40 share over the fruits of such endeavor. The announcement came amid controversies over both territorial and economic zone issues with China with whom we’ve aggressively renewed diplomatic relations. Those relations are focused on economic development and less focused on political alliances. Even lesser on differences and disputes.
Unfortunately, even before the last word had left the lips of those tasked to officially announce the proposal, quick to pounce on virtually everything related to the Duterte administration, the political opposition started railing and ranting.
It would have helped if reason, rationality and brains were first engaged prior to freaking out. Note the knee-jerk criticism by the tag team of Sen. Risa Hontiveros and former President Benigno Aquino III.
“It is preposterous and treacherous. It reverses our historic victory at The Hague and signs away Philippine sovereignty in the West Philippine Sea. In case the DFA (Department of Foreign Affairs) failed to read the ruling, the UN (United Nations) decision is very clear. We have sovereign rights to access offshore oil and gas fields, including the Reed Bank, within our 200-mile Exclusive Economic Zone. We don’t share ownership of the West Philippine Sea with China.”
You can almost see the hair-pulling, the gritted teeth, the veins popping and the venom spat out if only to paint our multi-dimensional strategy to gain from our economic zones as nothing more than a surrender to perceived Chinese expansionism.
To debunk their criticism, indulge us as we go through critical points that reveal the sheer ludicrousness of their counter-arguments and, exposing the amount of intellect or its hollowness or sheer absence that they substantiate their criticism with.
The most basic is the difference between economic rights and ownership. Rights can be shared. Not ownership.
A joint exploration for natural resources either covered by territorial sovereignty statutes or rights granted by international courts is not a question of ownership. Their line, “We don’t share ownership of the West Philippine Sea with China,” while accurate is misplaced. The proposal for a joint undertaking does not mean ownership sharing.
The 60:40 ratio refers to costs expended to carry out the enterprise on one end and on the other, the sharing of net yields following the same ratio in cost sharing. In no sense are these reflective of ownership or equity.
Note similar arrangements in other extractive endeavors undertaken by entities, both local and foreign, in the sectors of mining and submarine exploration where a 60:40 sharing of productivity is involved.
In the extractive sectors where the natural resources remain the property of the state, such agreements are not new. Do the research and analyze similar synergistic enterprises in the exploration of the offshore Malampaya gas fields where an international conglomerate is recompensed through a yield sharing agreement involving the asset securitization of receivables.
Because the offer is initiated by us as we recognize our limitations in funding such capital intensive explorations thus compelling a joint sharing of yields as payments and the fact that the 60:40 ratio is in our favor collectively makes the arrangement financially viable.
Moreover, rather than weaken our victory won at The Hague court, it reinforces it. The proposal in fact strengthens our sovereignty rights as it recognizes our right to offer a share of Philippine resources in exchange for technical and capital expenditures.