Recto Bank: Will PH strike gas?

When President Marcos took office in 2022, his administration vowed to ramp up oil and gas investments, starting within the safer terrains of the Philippines’ exclusive economic zone (EEZ).

- MYRNA M. VELASCO

It also eyed the flashpoint: restarting exploration and drilling in the contested waters of the West Philippine Sea.

In nearly every state visit, President Marcos drives home one relentless message: the Philippines will not waver on its sovereign claim over the West Philippine Sea. So far, the world has been listening—with allies like the US, Europe, and other Asian neighbors ready to back Manila in this diplomatically sensitive power struggle.

When it comes to asserting sovereign rights, nothing could speak louder than forging ahead with the long-stalled exploration and drilling activities at Recto Bank. This is a petroleum resource widely perceived to dwarf Malampaya’s gas reserves and could ultimately redefine the nation’s energy future.

If truth be told, that drilling could have been the government’s acid test in defending its territorial claim. Realistically, though, that’s easier said than done, because turning that ambition into action will be a whole different, tough battle.

With less than three years left in the Marcos administration, this is the harsh reality that stares us down: China’s relentless aggression and a paralyzing diplomatic deadlock could further hamstring Recto Bank’s exploration venture. It may end up as another unresolved crisis handed off to the next administration.

But beyond Recto Bank and the ongoing Malampaya drilling, how aggressively is the Philippine government advancing exploration and production (E&P) investments?

Amid uncertainties in the West Philippine Sea, there is a sliver of hope. The Supreme Court recently ruled (in the Malampaya case) that private contractors’ income taxes would be counted in the government’s royalty share. This is widely perceived as a win for investors, and if the Department of Energy (DOE) plays its cards right, this could reignite interest in the country’s upstream sector.