The governments of China and the Philippines have signed an agreement to carry out joint oil and gas development in the South China Sea.

In addition to several other deals in multiple sectors, the agreement was signed during China President Xi Jinping’s visit to the Philippines.

Xi’s visit assumes significance as it represents the first state visit by a Chinese leader in 13 years, in what is seen as a sign of improving relations between the two countries.

The countries had a strained relationship due to a longstanding territorial dispute over the South China Sea.

However, Philippines President Rodrigo Duterte caused a tectonic shift when he veered the country away from its traditional ally, the US, and towards China after assuming office in 2016.

Describing the presidential visit as ‘a landmark moment in our shared history’, Duterte said: “We have turned a new page and we are ready to write a new chapter of openness and co-operation.”

The parties did not release the details of the oil and gas agreement’s framework.

“We have turned a new page and we are ready to write a new chapter of openness and co-operation.”

However, the Philippines opposition senator Antonio Trillanes released a draft framework, which stated that the proceeds from joint exploration would be shared equally between the countries and the existing disputes would be resolved through consultation, the Financial Times reported.

The proposed joint exploration is being condemned by opposition leaders as they feel the deal would undermine the Philippines’ sovereignty over the disputed region.

Trillanes and fellow opposition senator Francis Pangilinan urged Duterte not to sign any agreement that ‘diminishes the Philippines’ exclusive rights’ and violates the country’s constitution, according to the publication.

An international tribunal in The Hague in 2016 rejected Beijing’s territorial claims in the South China Sea and ruled in favour of the Philippines.

The area of the South China Sea off the coast of the Philippines’ Palawan island is believed to house rich energy deposits.

The Philippines Government suspended oil and gas exploration in the region in 2015.

According to, the draft agreement stipulates the formation of working group that is expected to comprise members from the China National Offshore Oil (CNOOC) and an energy firm to be appointed by the Philippine Government.

Once the working group finalises the details of the joint exploration, CNOOC and the designated Philippine energy company are expected to enter a contract.