FACT CHECK South China Sea: Waters of Contention

VERA FILES FACT CHECK: No tension in South China Sea during Arroyo administration?

Former Solicitor General Estelito Mendoza said there was “relative quiet and peace” in South China Sea during the Arroyo administration.

At the launch of his primer on the West Philippine Sea Thursday, Mendoza, together with former president Gloria Macapagal-Arroyo and her executive secretary Eduardo Ermita, said the situation with China was never hostile when Arroyo was president, unlike the time of former President Benigno Aquino III.


“What is catching the attention, not only of the countries bordering the South China Sea, is practically the continuing tension in the South China Sea, the posturing of the naval might of the United States, of China, or other countries. That did not exist during the Arroyo administration. There was relative quiet and peace.”

(Source: Arroyo advises Duterte: Concentrate on economic ties with China, CNN Philippines, April 21, 2017)

Is Mendoza correct in saying that there was no tension over the South China Sea during the nine-year Arroyo administration?



On Feb. 22, 2010, four months before Arroyo’s term as president ended, China sent a note verbale to the Philippines expressing its “strong objection and indignation” over the Arroyo administration’s award of a service contract to Forum Energy, an oil and gas company, for the exploration of Recto Bank, internationally known as Reed Bank.

A note verbale is a kind of a diplomatic note used for correspondence between two governments. Written in the third person, it is used to inform governments about a fact, a state’s position and initiating or requesting specific action.

Earlier that month, the Department of Energy (DOE) converted Forum Energy’s 2002 Geophysical Survey Exploration Contract (GSEC, in this case known as GSEC 101) to a service contract (Service Contract 72 or SC 72) which eventually led to commercial operations in Reed Bank.

China demanded that the service contract be withdrawn, as it claimed jurisdiction over Spratly Islands where it alleged Reed Bank is found. China argued that it has indisputable sovereignty, sovereign rights and jurisdiction over Nansha (Spratly) Islands and its adjacent waters.

It said the area covered by GSEC 101 is in the waters of China’s Nansha (Spratly) Islands. As such, the act of the Philippines awarding the contract to Forum Energy has seriously infringed upon China’s sovereignty and sovereign rights and goes contrary to its commitments on the South China Sea issue and to the maintenance of peace and stability in the area. The act, they said, is illegal, null and void. (Source: The South China Sea Arbitration Award of July 12, 2016, p. 262)

China sent another note verbale on May 13, 2010, a month before Arroyo’s term expired, reiterating its objection to the exploration.

The Philippines never replied to these diplomatic notes until April 2011, when Aquino was already in power, after Chinese vessels harassed Forum Energy’s seismic survey vessel going around the Reed Bank.

A month earlier, in a meeting with the Department of Foreign Affairs, the chargé d’affaires of the Chinese Embassy said the Philippines reneged on its commitment to China made during the Arroyo administration, regarding the exploration on Reed Bank.


Reed Bank is located about 85 nautical miles west of Puerto Princesa. It is part of Palawan. Completely submerged underwater and a continental shelf by definition, it is within the country’s 200-nautical-mile exclusive economic zone. The Malampaya gas field is adjacent to Reed Bank.

Reed Bank falls within the area defined by the United Nations Convention on the Law of the Sea (UNCLOS) as part of the territory of a coastal state which has the sovereign right to explore, exploit, conserve and manage the natural resources found there.

Vietnam, Taiwan and China also claim Reed Bank, where oil and gas deposits abound: 1.035 million hectares of potential gas field worth some $23.2 billion, according to DOE estimates.

China included it in its nine-dash-line map, which covers almost the entire South China Sea. They have made repeated representations to the Philippines regarding the GSEC 101 issue since 2002.

In 2007, 2009 and February 2010, former Foreign Affairs Secretary Alberto Romulo assured China that the Philippine government will not grant Forum Energy the conversion of GSEC 101 into a service contract. Romulo said that GSEC 101 will not be an issue in the two countries’ relations.

The location of Forum Energy’s GSEC 101 in the Reed Bank (Source: The South China Sea Arbitration. Award of July 12, 2016)

However, the Philippines went against its commitment and converted GSEC 101 into a service contract in February 2010 when it gave the company SC 72, a seven-year exploration contract that can be extended by three years. The contract includes a 25-year production period which can be extended by another 15 years.

China has moved for the cancellation of the contract since then, prompting a reply from the Philippines in April 2011, a month after the incident with the Chinese vessels and all exploration activities in the area were stopped. (Source: The South China Sea Arbitration Award of July 12, 2016, pp. 263-264)

Michael T. Toledo, Philex senior vice president for corporate affairs, told VERA Files last year that Philex is waiting for the government’s instruction on SC 72 and exploration in Reed Bank. Philex Mining owns 64.79 percent of Philex Petroleum Corporation (PPC). PPC in turn, owns 64.5 percent of Forum Energy.


Malaya Business Insight. Arroyo blames Aquino for Chinese activity in SCS. April 21, 2017 Arroyo blames Aquino for China island-building. April 21, 2017

CNN Philippines. Arroyo advises Duterte: Concentrate on economic ties with China. April 21, 2017

People’s Television. CGMA: PDU30 knows what he is doing on WPS. April 20, 2017

PhilStar. Arroyo lawyer: South China Sea quiet during GMA admin. April 20, 2017

Permanent Court of Arbitration. The South China Sea Arbitration Award of July 12, 2016. Chinese firm rejects MVP offer for share in PH project in Reed Bank. March 9, 2014 Pangilinan offers Spratlys to Chinese oil firm in Reed Bank talks. March 10, 2014

GMA Network. Recto Bank holds huge gas reserves, says operator Forum Energy. April 24, 2012 Forum Energy completes Reed Bank survey. March 23, 2011 Forum Energy given Palawan oil service contract. February 18, 2010

PhilStar. UK firm to search for gas in Reed Bank. June 24, 2002

Philex Mining Corporation Corporate Profile

Bolewski, W. (2007) Diplomacy and International Law in Globalized Relations. Leipzig, Germany: Springer-Verlag