From: http://www.comelec.gov.ph/?r=References/RelatedLaws/Constitution/1987Constitution/Article12
Section 2. . .
The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. In such agreements, the State shall promote the development and use of local scientific and technical resources.
The Vietnamese call the region Block 136-03 and have leased it to a company called Talisman-Vietnam, a subsidiary of Repsol.
China calls it Wanan Bei-21 and has leased the same piece of seabed to a different company.
From: http://pnoc-ec.com.ph/service-contract-no-57-calamian/
Service Contract No. 57 – Calamian
Project Location : Offshore Northwest Palawan
Nature of Project : Petroleum Exploration
JV Partners and Percent Equity : China National Offshore Oil Company International Limited (CNOOC) – Operator 51%, PNOC EC 28%, Mitra Energy Limited (MITRA) 21%.
Project Description: SC 57 was awarded to PNOC EC on 15 September 2005. It covers a total area of 7,120 sq. km. in offshore Northwest Palawan and is situated around fifty (50) kms. northwest (NW) from the north-westernmost tip of Busuanga Island.
CNOOC farmed-in into SC 57 on 3 April 2006 acquiring 51% participating interest and operatorship while Mitra Energy farmed-in on 3 March 2006 getting 21%. The Deed of Assignment to formalize their entry has yet to be signed by the President of the Philippines.
Brief Background : SC 57 is within the prolific NW Palawan block and is host to the Bantac I well, a non-commercial oil discovery by Occidental Petroleum. With the farm-in of CNOOC and Mitra, additional 2,200 km. of 2D seismic data was acquired on top of the 3,300+ km. acquired by the previous contractors.
However, the request for approval of the Deed of Assignment to CNOOC and Mitra Energy has been pending since 2006 with the Office of the President (OP). SC 57 is currently under force majeure but exploration activities will resume once approval is granted.
By Ian Nicolas P. Cigaral (Reporter)
and Victor V. Saulon (Sub-Editor)
A JOINT development between the Philippines and China in the resource-rich South China Sea would be difficult to implement and may not conform with Manila’s legally won entitlements over the sea, an expert from a US think tank said.
Both countries, which have overlapping claims over the contested waters, are now open to the idea of joint energy ventures, with China’s foreign ministry recently saying that such cooperation will not “impair” the “final delimitation of boundary.”
But according to Gregory B. Poling, director of the Asia Maritime Transparency Initiative (AMTI) of Washington’s Center for Strategic and International Studies, working out such an agreement will be difficult considering its complexity.
He explained that under such arrangement, Manila and Beijing would “set aside” questions of sovereign rights, which he said would disregard the arbitral award won by the Philippines in an international court last year.
“That would not be in keeping with the arbitral award, which recognized Reed Bank as being part of the Philippine continental shelf,” Mr. Poling, who specializes on maritime security issues in Asia, said in an e-mail interview last week.
“But more importantly, it would violate the Philippine Constitution and would probably face an immediate court challenge. In other words, China and the Philippines are talking about very different things here,” he added.
“Getting both sides to say they like the idea of joint development was the easy part — working out an actual arrangement will be much, much harder.”
< Edited >
‘EASE TENSION’
In the same interview, Mr. Poling qualified that any commercial energy ventures like the one discussed by Philippine oil and gas firm PXP Energy Corp. and China National Offshore Oil Corp. (CNOOC) would be “great” and could ease tensions.
But China may not approve such cooperation, Mr. Poling also said, adding that China instead “seems to be interested in a joint development scheme.”
“It (commercial energy agreement) would lower tensions and would be entirely consistent with international and Philippine law. But there is no indication that Beijing would agree to that kind of a deal,” he said.
Talks between PXP and CNOOC about joint exploration and development of Reed Bank were disrupted in late 2014 after Manila, under the administration of then president Benigno S. C. Aquino III, filed an arbitration case against Beijing.
Citing warmer ties with China, PXP said it is hoping to revive the stalled negotiations under Mr. Aquino’s successor, Rodrigo R. Duterte, who has set aside The Hague ruling in exchange for billions of dollars in Chinese aid and investment.
< Edited >
Among the service contracts (SC) that had been placed on force majeure is Service Contract 72, which is covered by the decision handed down by the Permanent Court of Arbitration in The Hague in the Netherlands on July 12, 2016.
The court ruled that Reed Bank, where SC 72 lies, is within the Philippines’ exclusive economic zone as defined under United Nations Convention on the Law of the Sea.
On March 2, 2015, the DoE placed SC 72 under force majeure because the contract area falls within the disputed area, which was the subject of the arbitration process.
Under the terms of the force majeure, exploration work at SC 72 is suspended from Dec. 15, 2014 until the DoE notifies the exploration company that it may continue drilling.
< Edited >
For now, what the DoE is allowing for exploration are areas within Philippine sovereignty, Mr. Cusi said.
The map below comes from the following document.
(http://defenseph.net/bootcamp/wp-content/uploads/2018/03/ied.png)
SC 49 covers the bottom quarter of Cebu island.
(http://defenseph.net/bootcamp/wp-content/uploads/2018/03/sc49.png)
Barangay Montpeller in Alegria appears below.
(http://defenseph.net/bootcamp/wp-content/uploads/2018/03/montpeller.png)
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China firm to start oil drilling in Alegria
March 4, 2014, Tuesday | by: Xerxes Alkuino
http://www.cebu.gov.ph/news/china-firm-to-start-oil-drilling-in-alegria/
A Chinese firm, China Internal Mining Petroleum Company Ltd. will start its oil exploration project in Barangay Montpeller, Alegria, south of Cebu in the next few months.
Department of Energy (DOE) 7 Director Antonio Labios said the area has potential oil deposits. This was based on the previous oil drilling activities in the same area but were not able to reach the deeper ground, which a large number of oil deposits may be found.
“They hope that with the modern technology they could go as deep as more than 1,000 to 2,000 meters deep,” he told the media in an interview on Monday, March 3.
Vladimir Gerchikov, the company’s country manager said, they have already acquired a service contract from the DOE. The company is already in the process of entering a lease contract for the oil field in Alegria.
Gerchikovand company briefed Governor Hilario P. Davide III and Vice Governor Agnes Magpale on Monday, March 3 about the project in a meeting arranged by Dir. Labios.
The officials of the municipality of Alegria, lead by Mayor Verna Magallon, were also present during the meeting at the Capitol.
Gerchikov said they are asking the governor’s and the community’s support on the “major project,” which would highly benefit the province.
Governor Davide supported and wished luck for the company in its oil drilling activity. The governor said his main concern is only the safety of the environment and of the local folks.
“Angimportantegyudparanako as governor, nga no adverse effect kinisaatong environment and the people in the municipalities where they are drilling are protected gyud,” the governor said.
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China International Mining Petroleum Company Limited Key Developments
China International Mining Petroleum Company Limited Receives Approval Plan for Development of SC49 Block
Dec 20 17
https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=102222579
The board of directors of the Polyard Petroleum International Group Limited announced that on 19 December 2017, the Department of Energy of the Government of the Republic of the Philippines has granted the approval of the Plan of Development for oil for the SC49 Block to China International Mining Petroleum Company Limited. The approval of the Oil POD will serve as the basis for the Joint Declaration of Commerciality.
Alegria, Cebu rejoices: We struck gas!
By: Futch Anthony Inso, Jose Santino Bunachita - @inquirerdotnet Inquirer Visayas / 08:32 PM March 16, 2018
CEBU CITY – Commercial quantities of natural gas and oil resources have been found in the southern town of Alegria, Cebu that can last for 19 years.
The Department of Energy (DOE) and its partner, a Chinese exploration firm, were set to start production of the on-shore gas and oil mining site in Alegria, a 4th class municipality located more than 110 km from Cebu City.
The news was welcomed by Alegria Mayor Verna Magallon who saw the development as an opportunity for the town to improve economic activities and generate more jobs.
< Edited >
Last March 14, Energy Secretary Alfonso Cusi declared that the Alegria Oil Field, located in Barangay Montpeller, has commercial quantities of natural gas and oil resources that can last until 2037.
Cusi made the pronouncement after a ceremonial signing of the Joint Declaration of Commerciality (JDC) between the DOE and service contractor China International Mining Petroleum Company Limited (CIMP CO. Ltd).
In a press release posted on its website, the DOE said exploration and drilling services on the oil field by CIMP started as early as 2009 and was covered by Petroleum Service Contract (SC) No. 49.
An estimated 27.93 million barrels of oil (MMBO) with a possible production recovery of 3.35 MMBO or a conservative estimate of 12 percent of total oil in places (reserves) were found.
For natural gas, about 9.42 billion cubic feet (bcf) reserves were found, with the recoverable resource estimated at 6.6 bcf or about 70 percent of total natural gas in places/reserves.
< Edited >
Read more: http://newsinfo.inquirer.net/975936/alegria-cebu-rejoices-we-struck-gas#ixzz5A52iwuYz
Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook
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(http://defenseph.net/bootcamp/wp-content/uploads/2018/03/17alegria.jpg)
Chinese drilling operators and geologists brief DOE officials at the Alegria oil field in Alegria, Cebu province
PH, China to work out how to tap oil, gas that both sides claim
Published February 14, 2018, 2:42 PM
By Reuters
https://news.mb.com.ph/2018/02/14/ph-china-to-work-out-how-to-tap-oil-gas-that-both-sides-claim/
The Philippines and China have agreed to set up a special panel to work out how they can jointly explore oil and gas in part of the South China Sea that both sides lay claim without having to address the explosive issue of sovereignty.
China claims most of the South China Sea, where $3 billion in sea-borne trade pass every year, and has competing claims in various parts of it with Brunei, Malaysia, Taiwan, Vietnam and the Philippines.
“It’s just the start of a process,” Philippine ambassador to China, Chito Sta. Romana, told reporters late on Tuesday after diplomats from both sides met for the second time under a bilateral mechanism aimed at defusing longstanding maritime tensions.
He said the decision to form a working group on cooperating on energy was a “breakthrough”.
Forming an agreement for a joint project would be extremely complex and sensitive as both countries claim jurisdiction of the site of the oil and gas reserves, so sharing them could be deemed legitimizing the other side’s claim, or even ceding sovereign territory.
The idea of joint development was first hatched in 1986, but disputes and the sovereignty issue have stopped it from materializing.
But time is of the essence for the Philippines, which relies heavily on energy imports to fuel its fast-growing economy. That is complicated by estimates that its only domestic natural gas source, the offshore Malampaya field, will be depleted by 2024.
< Edited >
PH to have control over China in Service Contract 57
Published March 5, 2018, 3:49 PM
By Argyll Cyrus Geducos
https://news.mb.com.ph/2018/03/05/ph-to-have-control-over-china-in-service-contract-57/
< Edited >
“As far as 57 is concerned, they will comply with the decision with La Bugal [ruling]. They can participate in exploration and exploitation provided, as the decision says, we have ultimate control over the exploration and the development,” Roque said.
< Edited >
However, Roque said the same does not apply to SC 72 as there is an ongoing dispute in the said area between the Philippines and China.
SC 72 was awarded to Sterling Energy Ltd in June 2002. It is located in the West Philippine Sea, west of Palawan Island and southwest of the Shell-operated Malampaya Gas Field. SC 72 covers 8,800 square kilometers.
“As to [SC] 72, the agreement on joint exploration will be governed by international law because there has to be a treaty to be signed between the Philippines and China first on the joint exploration before it can be implemented by juridical entities of the contracting states,” Roque said.
“That’s why if we enter into an agreement, we’ll have to spell out the respective rights and obligations of the parties by way of a compromise,” he added.
< Edited >
SECTION 21. No treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the Members of the Senate.
Interesting idea.
There is one other place on this planet besides the South China Sea where there are multiple overlapping claims by several nations.
And for almost 60 years there has been a treaty in place which gets all the claimants to set aside their sovereignty issues so that everyone can use that place peacefully.
That place is Antarctica.
Don't know if it would work. But it is interesting.
https://www.odt.co.nz/news/dunedin/antarctic-treaty-model-south-china-seaQuoteAntarctic Treaty model for South China Sea
By John Gibb
Rising international tensions over disputed areas in the South China Sea could be reduced by nations taking a leaf out of the Antarctic Treaty approach.
That comment was made recently in Dunedin by Sir Kenneth Keith (78), a judge who was the first New Zealander elected to the International Court of Justice (ICJ) in its 70-year history.
Sir Kenneth commented in an interview, after giving a University of Otago open lecture, which was part of a series of talks organised by the university’s National Centre for Peace and Conflict Studies.
The talk was devoted to "World Peace through World Law: the role of the ICJ and other international courts and tribunals".
An arbitral tribunal of the Permanent Court of Arbitration in The Hague concluded in July China had no legal basis to claim "historic rights" to some disputed areas in the South China Sea.
Sir Kenneth emphasised that this tribunal outcome was not the end, but should be only the beginning of continuing dialogue among nations involved with the South China Sea.
"They have to go on living with one another."
The United Nations Charter required nations to settle their international disputes by peaceful means, and the Association of Southeast Asian Nations (Asean) Charter also emphasised international co-operation and peaceful resolution of disputes.
New Zealand itself had complex interests in the area, given that China was a major destination for our exports, and also that many of our overall exports were also shipped through the South China Sea.
The territorial disputes involve claims by several countries, including Vietnam, the Philippines and China.
Access to oil, natural gas, minerals and fishing resources are also key factors.
Sir Kenneth said that the Antarctic Treaty model had long proved successful, and many countries, including New Zealand, undertook research in the Antarctic, but the area was demilitarised, and ownership issues had been put to one side.
Sir Kenneth, of Wellington, was one of the 15 judges on the ICJ between 2006 and 2015.
He was earlier a judge of the New Zealand Court of Appeal and Supreme Court.
Comparisons
(http://defenseph.net/bootcamp/wp-content/uploads/2016/10/14711545_149750182155481_7905091200817492121_o.jpg) (http://defenseph.net/bootcamp/wp-content/uploads/2016/10/14707973_149750658822100_2612647466497016895_o.jpg) Competing claims in the Antarctic Competing claims in the SCS / WPS
South China Sea: Vietnam halts drilling after 'China threats'
By Bill Hayton
BBC News
24 July 2017
http://www.bbc.com/news/world-asia-40701121
Vietnam has reportedly terminated a gas-drilling expedition in a disputed area of the South China Sea, following strong threats from China.
A source in the south-east Asian oil industry has told the BBC that the company behind the drilling, Repsol of Spain, was ordered to leave the area.
It comes only days after it had confirmed the existence of a major gas field.
Those reports have been corroborated by a Vietnamese diplomatic source.
According to the industry source, Repsol executives were told last week by the government in Hanoi that China had threatened to attack Vietnamese bases in the Spratly Islands if the drilling did not stop.
< Edited >
Rosneft says South China Sea drilling is within Vietnam waters
Reuters Staff
https://www.reuters.com/article/rosneft-vietnam-southchinasea/rosneft-says-south-china-sea-drilling-is-within-vietnam-waters-idUSL3N1SO39Z
HANOI, May 17 (Reuters) - Drilling in the South China Sea by Rosneft is within Vietnamese territorial waters, the Russian state oil firm said in a statement on Thursday, two days after its Vietnamese subsidiary began drilling in Vietnamese waters claimed by China.
Rosneft’s local unit, Rosneft Vietnam BV, is concerned that its recent drilling in an area of the South China Sea that falls within China’s “nine-dash line” could upset Beijing, two sources with direct knowledge of the situation told Reuters on Wednesday.
“Offshore license areas of Rosneft on the South China Sea are situated within the territorial waters of Vietnam,” Rosneft said in its statement.
< Edited >
(http://defenseph.net/bootcamp/wp-content/uploads/2018/06/rosneft.jpg)
======
EXCLUSIVE-Vietnam unit of Russia's Rosneft fears Beijing backlash over South China Sea drilling
By James Pearson
Reuters
https://www.compuserve.com/politics/story/0002/20180517/M1L3N1SN56V_1735131997
* Rosneft announces drilling in Vietnam's Block 06.1 on Tuesday
* Block is in area outlined by China's nine-dash line-consultant
* That line lays claim to much of the South China Sea
* Vietnam previously halted project by Repsol in a nearby block
* Rosneft Vietnam did not want publicity for drilling-sources
HANOI, May 17 (Reuters) - Rosneft Vietnam BV, a unit of Russian state oil firm Rosneft, is concerned that its recent drilling in an area of the South China Sea that is claimed by China could upset Beijing, two sources with direct knowledge of the situation told Reuters on Wednesday.
Rosneft said on Tuesday its Vietnamese unit had started drilling at the LD-3P well, part of the Lan Do "Red Orchid" offshore gas field in Block 06.1, 370 kms (230 miles) southeast of Vietnam.
The block is "within the area outlined by China's nine-dash line," according to energy consultancy and research firm Wood Mackenzie.
< Edited >
In March, Vietnam halted an oil drilling project in the nearby "Red Emperor" block following pressure from China, sources told Reuters.
< Edited >
Fearing repercussions and pressure from China, Rosneft Vietnam had wanted to begin drilling with as little attention as possible, despite the statement by its parent company on Tuesday, the sources said.
< Edited >
The drilling is significant for Vietnam, which has been struggling to maintain its crude oil and gas output amid already declining production from its key fields and the continuing pressure from China in the disputed waters.
In April, Vietnam's state oil firm PetroVietnam said that maritime tensions with China will hurt its offshore exploration and production activities this year.
< Edited >
PRRD okays TWG on PH-China joint exploration
By Joyce Ann L. Rocamora August 7, 2018, 6:07 pm
http://www.pna.gov.ph/articles/1044041
MANILA-- President Rodrigo Duterte has approved the establishment of a technical working group (TWG) on the Philippines-China joint exploration in the disputed West Philippine Sea, Foreign Affairs Secretary Alan Peter Cayetano said Tuesday.
"I just got his approval in principle, but I can tell you that the areas where I want to have experts at the highest level, meaning we have Cabinet level," he told a press briefing in Taguig City.
For the environment, Cayetano said the TWG will have representatives from the Department of Environment and Natural Resources; for oil and gas, the Department of Energy; for security, the Department of National Defense, National Security Council, National Intelligence Coordinating Agency and the Department of the Interior and Local Government.
There will also be a legal team, composed of the Department of Justice and the Office of the Solicitor General to advise and help in the negotiation stage.
"In our arbitration award, we had a team, there's a legal team. In this case, it's not a legal team that's going to file a case, but a legal team that's going to advise us and help us negotiate," he said.
The legal team will focus on three components -- on oil and gas, on Constitutional law, and on the United Nations Convention on the Law of the Sea.
Cayetano also disclosed that the Chinese side is ready with its own technical working group.
"I'll let them make their own announcements. But as soon as both sides have working groups, at least we can talk. I'm not sure if we can agree but at least we can start talking."
Cayetano said the timeline is still "as soon as possible."
With the creation of working groups on both sides, he said they are hoping to finish the draft framework by September 2018.
"I am even more optimistic that we can come up with something by September. I've always told you it can happen tomorrow, it can happen in a year, but why are we rushing? Because Malampaya will run out in 2024," Cayetano said.
Cayetano maintained that any deal on the joint exploration talks will be in favor of the Philippines, which may be equal to the 60-40 Malampaya sharing or even better.
"Malampaya is structured on 60-40 but we're negotiating for better than that," he said.
Cayetano clarified that same as China, the Philippines also has an "indisputable claim" in the strategic waters.
But opting for a joint exploration talks instead of settling the territorial dispute first does not necessarily mean giving up the country's sovereign rights in the region, he said.
"We also have indisputable sovereignty over our territory which is defined by the Philippine Constitution, and we also have indisputable claims under the UNCLOS. But again, where do we take it from there?"
He said if the country is to wait for a decision on territory, "it might take forever."
"For us to come to some agreement, which is the same with the Code of Conduct in the South China Sea, we have to put aside territorial and sovereign rights claims but not abandon them," Cayetano said. (PNA)
PH, China to work out how to tap oil, gas that both sides claim
Published February 14, 2018, 2:42 PM
By Reuters
https://news.mb.com.ph/2018/02/14/ph-china-to-work-out-how-to-tap-oil-gas-that-both-sides-claim/
The Philippines and China have agreed to set up a special panel to work out how they can jointly explore oil and gas in part of the South China Sea that both sides lay claim without having to address the explosive issue of sovereignty.
China claims most of the South China Sea, where $3 billion in sea-borne trade pass every year, and has competing claims in various parts of it with Brunei, Malaysia, Taiwan, Vietnam and the Philippines.
“It’s just the start of a process,” Philippine ambassador to China, Chito Sta. Romana, told reporters late on Tuesday after diplomats from both sides met for the second time under a bilateral mechanism aimed at defusing longstanding maritime tensions.
He said the decision to form a working group on cooperating on energy was a “breakthrough”.
Forming an agreement for a joint project would be extremely complex and sensitive as both countries claim jurisdiction of the site of the oil and gas reserves, so sharing them could be deemed legitimizing the other side’s claim, or even ceding sovereign territory.
The idea of joint development was first hatched in 1986, but disputes and the sovereignty issue have stopped it from materializing.
But time is of the essence for the Philippines, which relies heavily on energy imports to fuel its fast-growing economy. That is complicated by estimates that its only domestic natural gas source, the offshore Malampaya field, will be depleted by 2024.
< Edited >
Locsin reveals China, PHL oil, gas M.O.U. text
By Recto Mercene - November 23, 2018
https://businessmirror.com.ph/locsin-reveals-china-phl-oil-gas-m-o-u-text/
THE Philippines and China failed to arrive at a firm agreement to start joint exploration anytime soon in parts of the South China Sea (SCS), but are keeping their options open to “possible energy cooperation” under a memorandum of understanding (MOU) signed on Tuesday during the visit of President Xi Jinping to Manila, Foreign Affairs Secretary Teodoro L. Locsin Jr. said.
Locsin read aloud in a television interview on Thursday some parts of the Philippines-China MOU on Oil and Gas Development, which topped 29 documents signed during Xi’s historic visit. The government had been asked by some quarters to reveal the full text of the oil-gas MOU immediately, amid growing anxiety over China’s real design, considering its rejection of a 2016 ruling by a United Nations tribunal invalidating its “nine-dash line” claim where it bases its claim over nearly 90 percent of the SCS.
According to Locsin, the deal signed during the state visit of Chinese leader Xi “merely seeks to study and discuss the prospects of a possible energy cooperation between the two countries.”
< Edited >
MOU on oil development recognizes Philippine sovereign rights, Carpio says
Ellen Tordesillas (Vera Files) - November 25, 2018 - 10:19am
MANILA, Philippines — Acting Chief Justice Antonio Carpio said Friday China could be recognizing the sovereign rights of the Philippines in the disputed waters of the South China Sea covered in the recently-signed Philippines-China Memorandum of Agreement on Cooperation on Oil and Gas Development through service contracting arrangements as provided in the MOU.
Answering a question on the vagueness of the MOU signed by Foreign Secretary Teodoro Locsin Jr. and Chinese Foreign Minister Wang Yi during the state visit of Chinese President Xi Jinping last week, he took note of this portion of the MOU:
"China authorizes China National Oil Corporation (CNOOC) to be the Chinese enterprise for each Working Group. The Philippines will authorize the enterprise (s) that has/ have entered into a service contract with the Philippines with respect to the applicable working area or, if there is no such enterprise for a particular working area, the Philippine National Oil Company –Exploration Corporation (PNOC-EC) as the Philippine enterprise(s) for the relevant working group."
China as service contractor
"So there's a recognition of service contracting by the Philippines. The way I interpret the MOU is that this is a cooperation by the Philippines with China on oil and gas activities through service contractors," Carpio said during a forum on "Maritime Disputes in the South China Sea-Navigating the Diplomatic Waters," organized by the Konrad Adenauer Stiftung and the Rizalino S. Navarro Policy Center for Competitiveness at the Diamond Residences in Makati.
"So China comes in by being a contractor of our service contractor or taking equity position in our service contractor or both. So China will come in through service contractors. That's my interpretation," he also said.
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Read more at https://www.philstar.com/headlines/2018/11/25/1871600/mou-oil-development-recognizes-philippine-sovereign-rights-carpio-says?fbclid=IwAR335cRtzUme3UTj9T6IPaHqK7QPEEvclP3quYIyylAgCjQTZCVl3vMkIhk#q8P1CIdacAGrqW3L.99