In late March 2026, the Philippines signaled its readiness to resume negotiations with China on oil and gas cooperation in the South China Sea amid a severe domestic energy crisis. On March 28, the two sides convened the 24th Foreign Ministry Consultations (FMC) and the 11th Bilateral Consultation Mechanism on the South China Sea (BCM) in Fujian, during which they held “initial exchanges” regarding the possibility of energy cooperation. This marked the first time since 2022 that the Philippines and China had resumed discussions on oil and gas cooperation within the BCM framework.
Several notable developments emerged from this process.
1. Drivers Behind the Resumption of Energy Cooperation
The Philippines’ move primarily stemmed from mounting domestic energy pressures. On March 24, 2026, President Ferdinand Marcos Jr. declared a state of energy emergency amid concerns over potential supply disruptions from the Middle East. The Philippines relies on imported oil for approximately 98% of its consumption, while national reserves have reportedly fallen to around 45 days of supply, contributing to sharp increases in fuel prices and growing social instability.
At the same time, domestic energy sources have been declining rapidly. The Malampaya gas field, which serves as a critical pillar of electricity supply for Luzon, is expected to be depleted by 2027, forcing the Philippines to shift toward costly LNG imports. Under such circumstances, the search for alternative solutions, including cooperation with China, has increasingly become a pragmatic option.
In addition, China has emerged as an important short-term energy partner. Shipping data indicate that large diesel cargoes from China have been delivered to the Philippines, making China a major supplier. The two sides have also expanded exchanges into fertilizers and other economic sectors, reflecting a trend of “tactical détente” aimed at reducing immediate pressures.
2. Constraints on Oil and Gas Cooperation
Despite these drivers, the prospects for cooperation remain constrained by multiple structural obstacles. The first challenge relates to legal and sovereignty issues. The 2016 South China Sea arbitral ruling, together with the 1987 Philippine Constitution, imposes strict limitations on all forms of joint resource development, particularly through the requirement that the Philippine state maintain control over natural resources.
Second, previous failures continue to cast a long shadow. The 2005 Joint Marine Seismic Undertaking (JMSU) was later declared unconstitutional by the Philippine Supreme Court, while cooperation efforts under President Rodrigo Duterte from 2018 to 2022 also failed to produce concrete outcomes due to unresolved legal obstacles. These precedents have generated significant political and psychological barriers.
Third, domestic political pressure and the lack of strategic trust remain major impediments. Elements within the Philippine military establishment, academic community, and legislature have openly expressed skepticism toward China, particularly as tensions at sea continue. China’s sustained maritime presence and its substantial stakes in Philippine energy infrastructure have further heightened concerns over national security risks.
3. Implications for Policy and the Region
In the short term, the Philippines is likely to pursue a more flexible approach toward China, focusing on dialogue, crisis management, and less sensitive areas of cooperation such as fuel supplies, fertilizers, or technical coordination. Mechanisms such as the BCM play an important role in managing incidents and maintaining channels of communication.
However, over the medium and long term, the likelihood of a breakthrough in oil and gas cooperation remains relatively low due to legal, political, and operational constraints, as well as the lengthy implementation timelines associated with offshore energy projects. Even if a framework agreement were reached, such projects would be unlikely to address the country’s immediate energy needs.
At the strategic level, this trend reflects a form of “survival diplomacy” pursued by the Philippines, prioritizing energy security and domestic stability while simultaneously maintaining a balance between China and its allies. For China, the resumption of dialogue helps reinforce its preference for bilateral approaches and advances the model of “shelving disputes and pursuing joint development.”
At the regional level, these developments may generate two parallel trends: on the one hand, they could encourage more flexible cooperative mechanisms aimed at reducing tensions; on the other hand, they could increase the risk of eroding legal norms if future agreements diverge from the framework of international law.
Read the original article in Vietnamese
hereTranslated by HC
