Manila In Talks For Sea Pact With Chinese Firm

The Philippines said on Thursday it is in talks with a Chinese state firm for joint South China Sea energy resource exploration and extraction, in a proposed deal described by President Rodrigo Duterte as akin to "co-ownership" of contested areas.

The two countries have long been embroiled in a bitter dispute over their competing claims to the region – with China claiming nearly the entire sea – but Duterte has in recent years softened his predecessors' policy of opposing Beijing's claims.

Duterte said on Wednesday an arrangement to turn two of the rival claimants virtual joint owners of the strategic and supposedly oil and gas-rich sea was preferable to the "massacre" of Filipino troops in a war with China.

"Now their [Beijing's] offer is joint exploration, which is like co-ownership. It's like the two of us would be the owners. I think that's better than fighting," he said during a visit to the war-torn southern city of Marawi.

Negotiations between the Philippines and China over South China Sea exploration were raised last month by Filipino Foreign Secretary Alan Peter Cayetano.

Presidential spokesman Harry Roque provided more detail on Thursday, specifying that talks were underway between the Philippines' energy department and an unnamed Chinese state firm, and that extraction of energy resources was now on the table.

He did not specify which specific area of the sea was under discussion.

"We might enter into an agreement with a Chinese-owned corporation, not the Chinese state itself," Roque said in an interview aired on ABS-CBN television, adding the company he declined to name was state-owned.

"I know that they're discussing, they're moving forward and it's likely to happen," he added without giving a timetable or the exact terms of the proposed deal.

"It's not that we have no choice. We can go back and say, 'Fine, no one benefits from the resources now'. But come on, we're trying to look for alternative sources of energy," Roque said on Thursday.

He said Filipino firms could not do it on their own and would need Chinese capital, while noting that "when a Filipino company attempted to explore on its own they were met by Chinese warboats". (AFP)