Why President Marcos Isn't Ruling Out Oil Exploration with China

A month after saying Manila won't yield to China's aggression in the highly disputed waterway at his fifth address to Congress, President Ferdinand Bongbong Marcos Jr. said on August 14, Friday, that there was a "distinct possibility" that Manila and Beijing could work together in oil and gas exploration in nearby features.

At a forum organized by the Foreign Correspondents Association of the Philippines with foreign journalists, the Philippine President cited progressing talks with China in the field of energy security.

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“We have to find new ways… this discussion has gained prominence. And where we are now, I think we have moved forward,” he said.

“The sense that I get is that all parties involved want it to succeed, and that is always a very good sign.”

Both regional neighbors had resumed high-level diplomatic talks in March as the feuding nations began chopping it up on steps toward cooperation on oil and gas ventures.

In 2024, Marcos said that the Philippines would look into exploring gas reserves in non-conflict areas within the country's exclusive economic zone in the South China Sea even amidst China's aggression in the waterway.

The President noted that talks with China on oil and gas exploration in the strategic waterway have not progressed due to disagreements on which areas fall within their respective territories.

Manila and China have been floating the idea of joint exploration for years, including looking at structures in the Reed Bank, but it eventually got stalled due to disagreements on sovereign rights over the water features.

With the President taking a more assertive stance on the South China Sea issue than the previous administration, ties between both countries continue to sour and strain due to continuous land and air skirmishes in the waterway.

Despite the heightened tensions between the neighbors, he said bolstering trade and economic ties wouldn't be off the table.

“I don’t think that’s in any policy, in any policy statement, that we are distancing ourselves from China,” Marcos said.

“We are continuing to find many, many instances where we are very much in cooperation with China. China is one of the biggest investors still in the Philippines,” he added.

Against the backdrop of tensions between China and the Philippines and the 10-year anniversary of the UN-backed Arbitral Award that voided Beijing's sweeping claim on the South China Sea, Marcos honored the Armed Forces and Coast Guard for facing great risks in the waterway and declared that Filipinos would continue to uphold Manila's legal claim over the disputed sea.

“Let me remind our friends and our detractors: Filipinos are a noble, kind, gracious, and great race. We are not greedy. We are not racists. We are not liars," the President said, alluding to a depiction by Chinese state media of Filipinos as monkeys criticizing the 2016 UN-backed ruling.

"We are respectful, and we are dignified. We are Filipinos, and we do not yield."

At the start of the year, the Philippine government made its first natural gas find in more than a decade near the 25-year-old Malampaya gas field, which is estimated to be depleted as early as 2027.

Marcos had announced a gas field called the Malampaya East-1 reservoir (MAE-1) located about five kilometers east of the existing Malampaya field off Palawan province, is estimated to contain about 98 billion cubic feet of gas in place.

It is said to be equivalent to almost 14 billion kilowatt-hours of electricity in one year.

This translates to being enough for about 5.7 million Filipino households and a much-needed sigh of relief for the Southeast Asian nation that is hard-pressed to find indigenous sources of energy and skyrocketing electricity costs for both businesses and Filipino families.

Initial signs and testing point to the well flowing at about 60 million cubic feet per day, which the President said is comparable to the original Malampaya wells and a sign of robust productivity.

Marcos in his SONA floated the idea of harnessing nuclear power to aid the country's efforts to remedy its energy woes and debilitating electricity costs for businesses trying to set up shop in the Philippines.

The Department of Energy earlier this week said that it is eyeing more potential sites for nuclear power facilities as the government targets about 1.4 gigawatts of nuclear capacity by 2038.

These would need an initial assessment and technical assistance from the International Atomic Energy Agency to give the green light on areas safe enough to host nuclear facilities.

Manila is working toward its goal of developing 1,200 megawatts of nuclear power generation by 2032, and beyond that, the nation is looking to harness 1,4000 megawatts of nuclear capacity five years later.

Energy Undersecretary Giovanni Bacordo said there are two potential nuclear power sites in Bataan, two sites in Palawan, one in Masbate, Pangasinan, and Camarines Norte.

"Nuclear can add firm capacity and diversify the energy mix, but it does not replace the need for other technologies,” according to Energy Secretary Sharon Garin.

Manila is trying to boost its share of renewable energy in the power generation mix to 35 percent by 2030 and to 50 percent by 2040. Renewables currently account for 22 percent of the Philippine energy mix.

Around this time in 2025 , the President signed into law a bill that aims to develop the country's natural gas industry and to promote natural gas as a "cost-effective source of energy and an indispensable contributor to energy security."

Under the Philippine Natural Gas Industry Development Act, power produced from indigenous natural gas will have priority over other conventional energy sources.

Entities may hold interest in upstream and downstream natural gas facilities as well as the supply of natural gas, but this will be subject to competition laws.

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