Ramon S. Ang, the president of San Miguel Corporation, emphasized the importance of the Philippines utilizing the energy resources in the West Philippine Sea. He stated that the country should not abandon its claims in the South China Sea, especially considering the vast energy potential in the area.
Ang pointed out that the Philippines has significant energy reserves in the West Philippine Sea, which should be protected and developed to secure the nation’s future. He expressed these views during an economic forum attended by key government officials, including Finance Secretary Ralph Recto. Ang highlighted the high energy costs in the Philippines, which are much higher than those in other Southeast Asian countries that produce oil or benefit from government subsidies.
He stressed that the high energy costs in the Philippines are not due to a lack of resources but rather the absence of government subsidies. Unlike neighboring countries, the Philippine government imposes taxes on electricity and fuel, which drives up prices for consumers.
Ang is well-informed about the importance of the West Philippine Sea, even mentioning the existence of a large natural gas field that needs to be developed. However, one of the main challenges in tapping these resources is the ongoing territorial dispute with China. PXP Energy Corporation, one of the largest oil and gas companies in the Philippines, has several contracts in the West Philippine Sea, but their exploration efforts have been hindered by the dispute with China.
Former Supreme Court Associate Justice Antonio Carpio also weighed in on the issue, suggesting that the Philippines could explore the oil and gas reserves in Reed Bank with the help of the United States. However, he acknowledged that this would only be feasible if the US provided substantial support to counter Chinese harassment. Carpio proposed that the Philippines adopt strategies used by Indonesia and Malaysia, where joint naval drills with the US and Australia deterred Chinese interference.
Carpio emphasized that the Philippines should leverage the Mutual Defense Treaty with the US, which promises mutual support in the face of external aggression. If the Philippines can effectively use this alliance, it could secure its rights to the valuable resources in the West Philippine Sea.
The potential of Reed Bank is enormous. According to a March 2023 report by the United States Energy Information Administration, Reed Bank could contain up to 10 billion barrels of petroleum and 6.7 trillion cubic feet of liquefied natural gas (LNG). To put this into perspective, the oil reserves could supply the global demand for about 100 days, and the LNG reserves could power millions of homes for years. For the Philippines, these reserves could provide oil for over 58 years and natural gas for approximately 63 years, transforming the country’s energy landscape and boosting its economy.
Ang, along with other government officials, must advocate for these resources as they are crucial for the future of the Philippine economy. Lower energy costs could significantly benefit the country, attracting businesses and investors.
In his remarks, Ang also discussed the impact of government policies on energy prices. He noted that if the Philippines adopted tax laws similar to those in Malaysia, Indonesia, and Thailand, it could lead to lower fuel prices. Despite the Philippines having lower power generation costs than its neighbors, the lack of subsidies and high taxes result in higher electricity prices.
The Philippines has attempted joint projects with China in the past, but these were terminated due to various issues. Under the current administration of President Bongbong Marcos, tensions between the two countries have escalated, with increased Chinese aggression reported by the Philippine Coast Guard. While a diplomatic solution could lead to joint ventures in the future, it remains uncertain whether this will happen during Marcos’ tenure.