Philippines free to walk away from oil development talks with China, Palace says

MANILA, Philippines — The Philippines is free to walk out of its memorandum of understanding on oil and gas development with China if it goes against its interests, Malacañang said Thursday, as some groups demanded that the government disclose details of the deal.

Presidential spokesman Salvador Panelo said the signing of the MOU on oil and gas development only means that the Philippines and China have "agreed to agree" on certain matters about the oil and gas development. 

He said the MOU is not legally binding and clarified that the two parties are not yet done negotiating on the matter.  

"That (signing of MOU) means you are going to put a guideline. These are the subject matters na pag-uusapan natin kung mag-aagree tayo dito (that we will discuss to see if we can agree). Then eventually there will be an agreement, official agreement," Panelo said in a chance interview. 

"The predicate is this agreement legal as far, as we are concerned, under the constitution? Number Two, is this beneficial to us? Otherwise, we won't allow it," he added.

Panelo explained that an agreement would be drafted once the two parties have decided on the terms. 

"After that draft, it has to go over the other party, and will look over whether or not the contents of your agreement are incorporated therein. Otherwise, the party will object to that or will revise it until they reach an agreement on what exactly will be the final draft," he said. 

RELATED: Philippines, China ink MOU on oil and gas development

'It should be favorable to us, not just to them'

Asked if the Philippines could still walk out of the MOU, Panelo replied: "Why not? Yes, definitely. If serious studies show it's wrong, you know, in law there is such a thing as rescission of contract. If the contents of the contract do not contain the intention of the parties, you can rescind it."

"Siyempre palaging dapat pabor sa atin, hindi lang sa kanila pabor (It should be favorable to us. It should not only favor them)," he added. 

But Panelo maintained that it is premature to criticize the MOU on oil and gas development because the two countries are still negotiating. 

The MOU on oil and gas development is one of the 29 deals signed by the Philippines and China during the state visit of Chinese president Xi Jinping in Manila. 

The opposition has demanded that the Duterte administration be transparent on the agreements and to explain how they would benefit Filipinos and serve the Philippines' interest. The government has not released copies of the MOU on oil and gas development as of press time. 

"I suppose it’s the DFA (Department of Foreign Affairs) secretary who will be releasing that. So we’ll have to ask him," Panelo said. 

No joint exploration anytime soon

Asked whether there is an assurance that the arbitral ruling that favored the Philippines would be considered in the negotiations with China, Panelo said: "As I have repeatedly said, the arbitral ruling is there forever, permanently. Nobody can take that away from us."

A Hague-based arbitral court voided China's expansive maritime claim in 2016 but the Chinese government refused to recognize the ruling, which stemmed from a complaint filed by the Philippines in 2013. 

Panelo said a joint development may not start anytime soon, noting that it has to be studied to ensure that it complies with existing laws. 

"We have to very sure that one it is constitutionally firm, number two, will we benefit from that?" the presidential spokesman said. 

Panelo said Duterte would lift the moratorium on all exploration and drilling works in the West Philippine Sea if advised by the DFA to do so. The moratorium, which was issued in 2012 by then President Benigno Aquino III, covered service contracts 72 in Recto Bank, a gas-rich area 80 nautical miles from Palawan and 75 in northwest Palawan. 

"If the recommendation of the SFA (secretary of foreign affairs) and the president thinks it is best suited to pursue and make forward our interests, he will do it. The president listens to advice and recommendations coming form members of his cabinet," Panelo said.  

"But ultimately it’s the president’s call and always based on whether or not it is for the best of the country."