Philippine Rise as a legacy
THE Duterte administration recently revoked all permits given to foreign entities conducting scientific research in Philippine Rise (formerly known as Benham Rise). The Philippine Navy and the Air Force were ordered to regularly monitor — and chase away if needed — any foreign fishing or research vessel in the area.
These protective measures are all in order as they are consistent with the Philippines sovereign rights over the Philippine Rise. The United Nations in 2012 ruled that the area is part of the country’s extended continental shelf (ECS). In other words, Filipinos are the only ones who can freely conduct research and exploration, exploitation, and development in the 13-million-hectare undersea plateau off the coast of Aurora province.
Research and exploration in the Philippine Rise should be continuing, given its immense aquatic resources and potential mineral and natural gas deposits. Filipino scientists and researchers have the knowledge and expertise to properly map and make an inventory of the area’s resources. But they will definitely need more financial and institutional support from the national government — or even from abroad.
That is why a separate agency to coordinate all research and exploration efforts in the area — whether conducted by Filipino or foreign researchers — is necessary.
The essential point is that the Philippines has exclusive exploration and exploitation rights — meaning all of the gas, oil, mineral, and marine products found there belongs solely to Filipinos. Congress should incorporate that principle in the charter of the agency it will establish.
To ensure that future generations will ultimately benefit, all proceeds that would be generated from Philippine Rise’s resources should be deposited in a Legacy Fund held in trust for Filipinos. A portion of these proceeds, not exceeding 40 percent perhaps, may be paid to any developer as compensation for their services in bringing the seabed wealth to market. Such a novel regime also must be introduced in the special charter.
Our leaders can take inspiration from the legacy fund created by Norway. In the 1990s, Norway decided to channel into a trust fund revenues from the vast petroleum reserves discovered in the North Sea. In 1996, the Scandinavian country levied significant taxes on the companies making use of their oil fields — in fact, up to 78 percent after profits and the cost of research and exploration. The fund is now professionally managed and invested in a balanced portfolio of stocks, bonds, and real estate.
After two and a half decades of prudent fiscal management and investment, Norway’s Legacy Fund has now become the world’s biggest sovereign wealth fund, accounting for up to 1 percent of all global stocks. In September, 2017, as production from Norway’s oil fields began to dwindle, the Legacy Fund already amounted to US$1 trillion — theoretically making every Norwegian man, woman, and child a millionaire.
Today, Norway draws from its Legacy Fund the money it requires for infrastructure, salary increases, university education, health and pension, among others. The country needs no extra tax levies for these purposes.
Few in Norway have called for more of their legacy fund to be spent for present needs — but the general consensus underlying the stockpiling of the proceeds from their natural wealth is to take care of the needs of future generations.
The Philippine Rise presents the present leadership with a unique and singular opportunity to help 100 million Filipinos and their children benefit from the country’s natural wealth. Such opportunity we can’t afford to squander, or allow other countries to grab from us. Let’s seize the moment. Let us not fail our children again.