Three’s Company: China, the Philippines, the United States and the South China Sea

The Philippines is pushing for private, foreign investment as
opposed to joint development of the Spratly Islands. On Monday, the Philippines
rejected a suggestion from China that the two South China Sea claimants consider
joint development of the contested Spratly Islands. Philippine Foreign
Secretary Albert del Rosario said that joint development of those blocs that “are
clearly ours it not a viable solution.” Instead, del Rosario said that the
Philippines would discuss inviting Chinese investors in lieu of joint development,
with oil and natural exploration governed by Filipino law.

According to reports, del Rosario also proposed that the
Philippines and China avail themselves of the dispute settlement mechanism
under the Law of the Sea Convention. According to del Rosario, Manila is “endeavoring
to look at all means to arrive at a peaceful solution of the disputes in the
West Philippine Sea in accordance with international law, specifically UNCLOS.”

Meanwhile, the Philippines has invited foreign investors to
explore for oil and natural gas deposits in areas that China claims as part of
the contested Spratly Islands. According to one report, “[Philippine]
Energy Secretary Jose Almendras said Monday the areas northwest of Palawan were
in Philippine territory and were two of 15 areas nationwide being offered to
foreign investors for oil and gas exploration.” The report notes that each
of the two areas is estimated to have approximately 440 million barrels of oil
and 2.2 trillion cubic feet of natural gas.

The recent developments between the Philippines and China are
likely to have ripple effects for the emerging U.S.-Philippine strategic
partnership. Over the last year, Washington and Manila have been forging stronger
ties: the United States transferred two Hamilton-class Coast Guard cutters in
an effort to shore up the Philippines’ maritime security forces and both
countries have been enhancing military-to-military training, with one upcoming
annual exercise scheduled to take place off the island of Palawan, close to a
disputed area of the South China Sea. Chinese officials have warned the
Philippines about U.S. involvement in the South China Sea dispute, saying that
it “would
make the issue more complicated and more difficult to settle among ourselves.”

However, it is unclear if the Philippines will cool off
developments with the United States in response to China’s warning, or steam
ahead with developing more robust ties. An article in this morning’s edition of
The Diplomat described the tensions between the Philippine legislature and
executive branch over how to best manage military relations with Washington
given the precarious position the country could put itself in with respect to
China. One issue that could potentially complicate further developments
between the Unites States and the Philippines is the issue over leveraging the
dispute settlement mechanism under UNCLOS. The United States has not ratified
the Law of the Sea Convention and is unable to support the Philippines in this
effort, which could undermine strategic partnership building depending on how
serious Manila is about availing itself of the framework established by UNCLOS.

U.S. policymakers will need to keep a close eye on the
ongoing developments between China and the Philippines. They are likely to have
implications for the United States as we push for greater engagement in the
Asia Pacific region.