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). 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.

At the 2023 ASEAN-Japan Commemorative Summit, Marcos doubled down on the Philippines’ push to resume petroleum exploration in the West Philippine Sea. However, he admitted that joint efforts with China had made “very little progress.” Since then, Beijing has only grown more aggressive in asserting its claims and has been taking hardline steps to tighten its grip on the contested waters.

The President similarly drew a firm line on the country’s position, declaring that the West Philippine Sea “is not in a conflict area” while emphasizing that it “is very clearly within our exclusive economic zone.”

In May 2023, the Philippines and China agreed to hold ‘preparatory talks’ on joint oil and gas exploration in the West Philippine Sea. But Filipino officials were walking a legal tightrope, haunted by a Supreme Court ruling that slammed the 2005 Joint Marine Seismic Undertaking (JMSU) as ‘unconstitutional’ for letting foreign firms exploit resources that belong exclusively to the Filipino people.

Exploration at Recto Bank was first halted in 2012, when then-President Benigno Aquino III pulled the emergency brakes on all drilling activities within Philippine-claimed waters amid escalating tensions with an increasingly belligerent Beijing.

During Duterte’s reign, the Philippines and China signed a memorandum of understanding (MOU) for joint oil and gas exploration ventures. But by the final months of that administration in 2022, Manila walked away and terminated talks, citing constitutional constraints and sovereignty concerns.

It was also in the closing chapter of the Duterte administration that extended seismic surveys and planned drilling activities at Service Contract 72 (Recto Bank) and SC 75 (Northwest Palawan basin) were suddenly scrapped, allegedly due to heavy pressure from China. From that time on, these activities were placed under ‘force majeure’ status, and no meaningful developments have happened since. Both blocks are under the operatorship of PXP Energy, chaired by business magnate Manny Pangilinan.

According to 2013 data from the US Energy Information Administration, Recto Bank holds massive untapped potential, with some estimates suggesting 5.4 billion barrels of oil and 55.1 trillion cubic feet of natural gas. If these reserves were proven commercially viable, they could become the Philippines’ biggest wager yet toward long-term energy security and a way to break free from crippling reliance on foreign fuel imports.

In previous media interviews, Pangilinan half-joked about waiting for a ‘Chinese Santa Claus’ to hand over a relatively smoother go-signal for exploration and drilling activities in the turbulent waters of the West Philippine Sea, primarily at Recto Bank.

It’s almost Christmas time again, and reality cuts through hope, slapping us with a harsh spin: Beijing isn’t playing Santa, and that long-awaited ‘gift’ is nowhere in sight.

Forum Energy, a subsidiary of PXP Energy, previously locked in all preparations for the drilling of two wells, including the purchase of long-lead items, requisitions for other drilling materials, and signing technical services. However, just as geophysical surveys were set to begin in April 2022, the DOE abruptly ordered the suspension of all exploration activities for Service Contracts 72 and 75, citing clearance requirements from the Security, Justice and Peace Coordinating Cluster.

Then, as the work program deferment was deemed ‘indefinite,’ Forum Energy officially sought the declaration of ‘force majeure’ for planned exploration activities at the blocks, a status the DOE quickly affirmed. It has been frozen in a legal and operational stalemate since then.

The Marcos administration has pledged to untangle the messy investment policies strangling the upstream petroleum sector. But beyond the promises, wider action remains elusive on comprehensively developing our indigenous oil and gas resources.

Compared to our Southeast Asian neighbors, the Philippines is lagging painfully behind in tapping its petroleum resources. With the Marcos administration already past the halfway mark of its term, it’s clear that frustration will only deepen as we watch regional peers surge ahead while the country remains shackled by bureaucratic and diplomatic gridlocks, leaving potential energy wealth stranded for even longer.

To date, while renewable energy and nuclear power are currently in the spotlight, the government must not lose sight of the urgent need to aggressively pursue fresh investments in the upstream oil and gas sector—and that must not stop with just Malampaya.

After all, President Marcos has repeatedly stated that while we’re scaling up RE investments, gas remains the essential partner to keep the grid relatively stable. So instead of us relying on volatile LNG imports, it’s far smarter to unlock and produce our own resources to fuel that demand.