MALAYA: 24,000 sq. km. sold; RP territory in GMA deal delineated

March 8, 2008

THE joint seismic study agreement the Philippines struck with China in 2004 preparatory to oil exploration in the disputed Spratlys covers an area that laps the western shores of Philippines, Malaya was able to establish yesterday.

The agreement has been kept secret by the Philippine government, but Malaya was able to secure a copy of Annex “A” which delineates the boundaries of the area covered.

At its farthermost eastern edge, the area is around 25 kilometers from the southern tip of Palawan. At its northern boundary, the area abuts the Malampaya oil field and includes an area the Philippines had long awarded to a British company for oil exploration.

Of the total 142,886 kilometers, around 24,000 square kilometers clearly belong to the Philippines and fall outside the areas in the Spratlys which are claimed either in whole or in part by the Philippines, China, Vietnam, Taiwan, Indonesia and Brunei.

The area also swallows almost 80 percent of the Kalayaan Group which the Philippines claims.

The Spratly island itself, which serves as the reference when referring to the Spratly Group, is at the westernmost edge area covered by the agreement. The island is about 700 kilometers from Palawan.

Malaya publisher Amado Macasaet, in an article, has said that President Arroyo and then Speaker Jose de Venecia might be held liable for treason for signing the agreement in exchange for loans “attended by bribery and corruption.”

Resolutions have been filed at both the Senate and the House calling for an inquiry into the “sellout” of Philippine territory.

Cabinet secretary Ricardo Saludo dared critics to question the Spratly deal before the Supreme Court instead of citing what he called hearsay.

“Why does the opposition keep resorting to press statements and partisan hearings? Is it afraid of impartial due process?” he said.

He said former Senate President Franklin Drilon, being a topnotch lawyer and former justice secretary, should “know how to test the validity of any agreement.”

Drilon, in a television interview, has said he was formally informed that the approval of the Chinese loan for the $500 million NorthRail project was tied to the Spratly deal.

Vice President Noli de Castro said he wants to hear the side of Malacañang and the Department of Foreign Affairs, adding that all he knows about the deal is based on media reports.

The Joint Marine Seismic Undertaking (JMSU) was signed on Sept. 1, 2004 between the China National Offshore Oil Corp. and the Philippine National Oil Corp., reportedly in exchange for billions worth of soft loans for projects like the national broadband network project, the cyber education project, and the North and South Rail projects.

Vietnam initially denounced the agreement, but came on board in March 2005.

The DFA has explained that the JMSU, which includes conduct of joint explorations and similar activities among the three Spratly claimants (China, Vietnam and the Philippines), does not impinge on the sovereignty and territorial integrity of the Philippines.

It said JMSU is “a landmark agreement that affirms the political commitment of three claimant states to approach their disputes in the South China Sea in a peaceful and constructive manner.” The Philippines and China were the first signatories to the JMSU. Vietnam later joined in the agreement.

Rep. Roilo Golez (Ind. Parañaque) said De Venecia must come out and tell everything he knows about the “origins and background” of the Spratly deal.

Golez and detained Sen. Antonio Trillanes IV have filed separate resolutions calling for a probe.

Golez said De Venecia should explain whether there is truth to the insinuation that there is a link between this agreement and China’s soft loan facility of $2 billion a year for controversial and allegedly overpriced projects like NorthRail, SouthRail, NBN-ZTE, among others.”

“The former Speaker must also clarify if there were other top officials who intervened in the signing of the deal. Knowing the decision-making process for deals of this nature, I cannot believe that the Speaker alone can swing this without Malacañang’s approval,” he said.

De Venecia has denied that the deal was forged in exchange for loans. He added the deal would even avert a potential conflict that may arise in the Spratlys.

De Venecia said that after the seismic data-gathering, it would only be logical to begin exploratory oil drilling which he said is very much needed in the face of the sky-rocketing prices of oil products.

Golez said the Spratlys is believed to contain oil reserves of around 200 billion barrels which at present oil price level would translate to around $20 trillion.

Rep. Orlando Fua (Lakas, Siquijor), senior vice chair of the committee on foreign affairs, on Wednesday night said in the plenary that the DFA has been lobbying against the passage of House Bill 3216 which defines the Philippines’ archipelagic baseline, including the Kalayaan Group of Islands and the Scarborough Shoal in the Spratlys.

Fua said this is the reason the House has not approved the bill on final reading despite its inclusion in the agenda.

Sources said the DFA does not want the House version because this would antagonize the Chinese who have been providing loans to the Philippines.


Senate majority leader Francis Pangilinan said if the Spratly deal is indeed tainted by anomaly, “then we must all be alarmed because then we will find that the Filipino people need to protect themselves from their very own government.”

Pangilinan said the Philippines entered into 31 agreements with China last year to promote bilateral trade and development in the next 10 years. These include the agreement to jointly undertake seismic studies of the Spratlys and explore the territory for oil and natural gas.

According to reports, the Chinese government committed $2 billion in official development assistance every year to the Republic of the Philippines until 2010 after the deal was signed.

Senators have said that the 67 bilateral agreements which the Arroyo administration signed with China seem to be a “precondition to the bilateral loan agreements granted by China to the Philippines to finance the government’s overpriced and anomalous projects such as the NBN-ZTE contract and the North Rail project.

Of the 67 bilateral agreements, 57 were signed after Aug. 31, 2003 or after talks were opened relative to China’s oil and gas exploration of Spratly Islands.


The National Union of People’s Lawyers said Malacañang’s challenge to bring the Spratly deal before the courts is meaningless and “of no value.”

Neri Javier Colmenares, the group’s secretary general, said no suit against the JMSU can be filed “unless President Arroyo allows officials, including Chairman Romulo Neri, to testify, and the negotiations leading to the JMSU, including the Agreement itself, are made transparent and publicly submitted to the Senate investigation.”

Colmenares nevertheless said the JMSU is “void if signed by President Arroyo and the Chinese government in consideration of fraudulent transactions in the various projects and loan agreements involving Chinese companies.”

“In fact, due to the fraudulent transactions accompanying the loan agreements, the Philippine has every right to demand the voidance of the loans should fraud be proved between the two parties,” he said. – Jocelyn Montemayor, Wendell Vigilia, JP Lopez and Anthony Ian Cruz