President Rodrigo Duterte is accompanied by Chinese President Xi Jinping inside the Diaoyutai State Guesthouse in Beijing prior to their bilateral meeting on Aug. 29, 2019. Rey Baniquet, Presidential Photo

MANILA -- The joint exploration deal being worked out in the West Philippine Sea is an “implied admission” by China that the area, believed to be rich in oil and gas deposits, belongs to Manila but also “face-saving” for Beijing, former Supreme Court justice Antonio Carpio said Monday.

The memorandum of understanding (MOU), and the terms of reference (TOR) detailing this preliminary document, he said, showed that Beijing “readjusted” its position, despite insisting it would never recognize Manila arbitral victory.

The 2016 ruling by the Hague-based Permanent Court of Arbitration invalidated Beijing nine-dash line doctrine, its basis for claiming more than 80 percent of the South China Sea.

National Security Adviser Hermogenes Esperon earlier said a 60-40 sharing scheme to explore new energy sources in the West Philippine Sea was “more than fair” for Manila.

“China knows it has lost (in The Hague). So it’s trying to get at least 40 percent of the gas and oil,” Carpio told a forum in Makati City, his first public address on the South China Sea dispute since retiring Saturday.

“China has readjusted its position and has offered an arrangement under the MOU and the TOR, which is a face-saving mechanism.”

WILLING CONTRACTOR

Carpio likened China’s role in the joint exploration deal to a lessee that could not claim ownership.

“Without expressly saying that we have sovereign rights over Reed Bank, they are willing to be our contractor and a contractor doesn’t claim ownership rights,” he said.

Reed Bank, also known as Recto Bank, is located within the Philippines’ exclusive economic zone, over which it exercises sovereign rights.

China sought to include the resource-rich underwater formation in its expansive claims in tne vital sea lane.

Recto Bank is covered by Service Contract No. 72, one of several arrangements put on hold by the Philippine government at the height of the maritime dispute during the previous administration.

“We cannot expect China to admit expressly in writing that the Philippines has exclusive sovereign rights in the West Philippine Sea,” Carpio said.

“We have to give China some space because (it) has taught its citizens... from Grade 1 to college... that they own the South China Sea since 2,000 years ago and suddenly they cannot just give it up. It has to be gradual and they have to explain to their people, ‘O, we’re taking 40 percent of the oil and gas anyway.’”

FIREWALL

President Rodrigo Duterte has been criticized for setting aside the arbitral ruling to court more aid and investment from China, a departure from the acrimonious relationship under the Aquino administration triggered by the maritime row.

Aquino’s foreign secretary, Albert del Rosario, on Monday cautioned against the “political consequences” of Manila’s financial dealings with Beijing.

“We may end up not only trying our hands, but also the hands of the next generation,” he told the forum.

Carpio described the Hague decision as a “firewall” that forced China to adjust its position on the arbitral ruling.

“We have made substantial progress already,” he said. “China cannot move beyond that firewall... If you notice, China is no longer talking about its nine-dash line the way it talked about (it) before.”