The 2025 SC-80 and SC-81 gas contracts in the Sulu Sea mark historic Bangsamoro participation in resource management, promising revenue and energy security. Yet without transparent oversight, community consent, and ecological safeguards, these agreements risk reproducing elite capture, undermining true Muslim self-determination and the long-fought sovereignty of the southern Philippines, writes Elroi Son Oller Panganiban.

In October 2025, Philippine President Ferdinand Marcos Jr signed two petroleum service contracts, SC-80 and SC-81 (formerly PDA-BP-2 and PDA-BP-3), covering 1.31 million hectares of the Sulu Sea in the Sandakan Basin, ancestral waters of the Tausug, Sama, Yakan, and other native peoples of the southern archipelago. SC-80 includes the Dabakan-1 and Banduria-1 gas discoveries, with estimated 2C contingent resources of 4.7–5.7 trillion cubic feet, while investor disclosures project roughly 10 TCF in prospective mean resources comparable in scale to the Malampaya gas field that once supplied about 40 per cent of Luzon’s electricity. Yet between 2009 and 2012, ExxonMobil spent nearly $400 million drilling three wells in the same basin, encountered gas, and ultimately withdrew, citing non-commercial quantities.

The officials were not wrong to call it historic. Because for the first time in Philippine history, a Bangsamoro governmental authority, the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), co-signed petroleum contracts as an equal partner with the national government.

The BARMM Ministry of Environment, Natural Resources, and Energy said, “Who would have thought that the Bangsamoro could reach this level of autonomy, allowing us to actively participate in the decision-making process and, more importantly, to have a share of resources and revenues? ”

Yes, it looks promising. It is indeed the fruit of a Muslim struggle that stretches back to the arrival of the Spaniards in the archipelago. But let us look back to uncover the core questions this moment raises. These petroleum contracts could represent genuine sovereignty, or they could reproduce elite capture unless transparency, consent, and governance safeguards are enforced immediately.

It is cruel to offer a people centuries-late justice through a slice of the very resources that were once taken from them. The Philippine Muslim struggle, a fight carved from fire, with soldiers torching villages, laws declaring centuries of habitation “unowned”, and settler colonials occupying a homeland where sovereign sultanates once stood, was long denied. The spark of the Bangsamoro Revolution was inevitable, for one cannot reasonably bargain with a newborn republic that carries only a narrow vision of nationhood that centres only on lowlander Christians and Tagalog-Catholic nationalism.

The Philippine Muslims have been waiting for this moment for centuries. The Sulu Sultanate, formally established in 1457, taxed foreign traders and managed royal monopolies over pearls, sea cucumbers, and beeswax, where the sea was not a barrier but a highway that interconnected the islands under an Islamic civilisation that predated the Philippine Republic by more than four hundred years.

Then Spain arrived, criminalising Muslim traders as “barbarians” and waging more than a hundred campaigns against people who refused subjugation. It hardened social divisions across the archipelago: Christianised and Hispanised natives were classified as Indio, Muslim natives were stereotyped as Moro, and those outside both categories were labelled Infiel. The United States followed by annexing Mindanao into the Philippine Archipelago and institutionalizing these three labels through the Public Land Act of 1905, shaping how Muslims and Indigenous Peoples would be governed and perceived by the Republic

Applying the doctrine of terra nullius, “land belonging to no one,” to Mindanao, and since then, it has neglected and bypassed the ancestral domain and Islamic customary tenure. Within a single generation, an estimated 2.5 to 3.5 million hectares of Muslim lands were transferred to American corporations, Japanese agribusiness, and Christian settler families. Muslim communities shifted from majority to minority in their own homeland, and titles were prioritised for corporations and settlers; disproportionately larger portions were granted to Christian settlers compared to Muslims.

Then came the timber economy, extracting sixty to seventy per cent of Philippine log exports from Mindanao’s forests in the 1960s and 1970s, while revenues bypassed Muslim communities entirely. Then came the Agus River Hydroelectric Complex, harnessing sacred Maranao waters to generate nearly 900 megawatts of electricity for the national grid for over 50 years.

So, when BARMM officials speak of these petroleum contracts as “fruits of a long and painful struggle”, they are not romanticising the past. They are describing a balance sheet of dignity finally restored, right where it belongs, in honour of the martyrs.

In October 2025, the Philippine government awarded Service Contracts SC-80 and SC-81 in the Sandakan Basin of the southwestern Sulu Sea to an Australian-British-Filipino consortium. One block alone is estimated to hold natural gas resources comparable in scale to the Malampaya field, which supplied roughly 40 per cent of Luzon’s electricity for two decades. The urgency behind these contracts is national energy insecurity: the Philippines imports nearly all of its petroleum, and Malampaya is projected to be depleted by 2027. With Chinese aggression stalling development in the West Philippine Sea, now, neoliberals have eyed going southward into the Philippine map into uncontested internal waters that have turned Bangsamoro waters not merely into development zones but into an energy security safety net. Hence, when President Marcos Jr said that “we have a sufficient supply of oil…So, we are okay for that period of time,” he meant the unexplored oil beyond the contested waters beyond the West Philippine Sea, as oil prices threaten to go up amidst the Israel-US military’s continuous meddling and aggression in the Middle East.

Under the Bangsamoro Organic Law of 2018, the Bangsamoro government is entitled to 50 per cent of the government’s petroleum revenues, a historic fiscal stake. However, this 50-50 split applies only to the government’s share of “profit petroleum”, not to gross production. Under the Philippine production-sharing model, contractors may recover 60–70 per cent of gross revenues as costs before profits are divided. Of the remaining petroleum profit, around 60 per cent goes to the government, and only then is that portion split equally between Manila and BARMM.

Consider Aceh. The Indonesian province’s 2005 Helsinki Peace Agreement, which ended a thirty-year separatist war, granted Aceh up to 70 per cent of its oil and gas revenues, more generous than BARMM’s 50-50 arrangement. Yet two decades later, Aceh remains among Indonesia’s poorest provinces. What bullets failed to capture, patronage quietly absorbed. Studies of the Special Autonomy Fund points to elite concentration and limited poverty reduction. Revenue sharing alone does not dismantle patronage; it can just as easily institutionalise it.

Across the world, post-conflict autonomy settlements increasingly hinge on resource extraction from Aceh to South Sudan to Iraqi Kurdistan. The promise is simple: peace will pay for itself. But without transparent institutions and community consent, resource wealth consolidates power rather than redistributes it.

The current Bangsamoro Transition Authority should also be understood within the context of the peace process itself. Transitional periods carry layered responsibilities, reflecting the movement from armed struggle to social movement to civilian governance. As established in the Bangsamoro Organic Law, the Moro Islamic Liberation Front (MILF) leads the Bangsamoro Transitional Authority (BTA), tasked with steering democratic institutionalisation until the Bangsamoro Parliament elections, while remaining partners in the peace process. The success of the Bangsamoro project is thus inseparable from the success of the peace process itself.

As Patricio Abinales argues, Mindanao is stable when the central state leaves it alone and erupts in conflict when the state intervenes aggressively. Whenever Manila imposes itself aggressively, Sulu resists; when Manila negotiates and retreats, Sulu is peaceful. Nassef Adiong has pointed out that the Bangsamoro Autonomous Region in Muslim Mindanao has been channelling billions of pesos into Sulu for infrastructure, health, education, and social services, contributing to a drop in poverty from 64 per cent to 14 per cent. And the Supreme Court ruling on the Sulu exit from BARMM has reset the conditions that historically determine whether the periphery consents or resists. Severing Sulu from this framework threatens to unwind those gains. Beyond fiscal loss, Sulu forfeits preferential fishing rights in regional waters, participation in maritime governance arrangements, and the political weight of belonging to a constitutionally recognised autonomous region.

In most post-conflict situations, former revolutionary leaders who achieved power during their revolution will stay in their dual political and security positions until their government needs to protect its unity and prevent internal splits. The same military leaders who used to command their troops now handle the negotiation process for development projects, which include resource exploration agreements. The existing situation functions as a practical solution that protects stability during an unstable transition period that needs delicate institutional management until normalisation reaches its full state.

The question, therefore, is not one of impropriety but of trajectory. The current stage of this process determines whether it serves as a key step for establishing peace through controlled power distribution to developing civilian governance systems or whether it requires improved power separation systems for upcoming political development in the region. The peace process will remain sustainable through former combatant leaders who govern because institutional safeguards will develop to protect transparency, accountability, and public participation rights at all times.

No community consent mechanism for the affected Sulu Sea communities, such as the fishing families of Tawi-Tawi, the often stateless Sama sea nomads, and the Liguasan Marsh farmers, who inhabit one of the Indo-Pacific’s most ecologically significant wetlands, has been publicly documented. The Sulu Sea is a lifeline sustaining the ways of life of these communities, but it is now viewed by neoliberals as an energy frontier. The Indigenous Peoples Rights Act mandates Free, Prior, and Informed Consent for activities affecting ancestral domains. No public evidence indicates that such consent was sought before the contracts were signed.

The Sulu Sea is the central area of the Coral Triangle, the world’s most important region for marine biodiversity, which contains more than 600 coral species and over 2,000 reef fish species that currently face severe threats from climate change, dynamite fishing, and overfishing. The first phase of offshore petroleum exploration, which uses seismic airgun surveys, has been shown in worldwide research to disrupt cetacean navigation, fish spawning cycles, and the structural integrity of coral reefs. Public access to baseline biodiversity surveys and Environmental Impact Assessment scoping documents for SC-80 and SC-81 has not occurred because all documents remain undisclosed.

The Liguasan Marsh, a 288,000-hectare wetland and critical Indo-Pacific bird sanctuary, is the last refuge of the Philippine crocodile. Its survival was ironically ensured by decades of armed conflict, which deterred industrial development that could have destroyed it. Designated a game refuge in 1941, the marsh now faces proposals for horizontal drilling outside sanctuary boundaries. While these may limit surface disruption, wetland hydrology and methane seepage systems are interconnected, so subsurface extraction does not guarantee ecological neutrality.

The Bangsamoro Organic Law’s co-management framework is a genuine and hard-won advancement of constitutional rights. A 50/50 revenue split is better than what came before. These things are true. However, the real test of self-determination is not the ceremony where contracts are signed, but the questions of when gas is extracted, who controls how revenues are used, who ensures environmental commitments are honoured, and who represents the fishermen in Tawi-Tawi whose livelihoods can vanish when seismic ships arrive.

The Philippine Muslim people did not endure five centuries of dispossession, the Spanish galleons, the American land acts, the Marcos militias, the Ilaga massacres, and the decades of armed conflict to become co-managers of their own extraction. They endured it for sovereignty, not merely a percentage of profit from petroleum, but the power to design institutions that prevent the repetition of colonial extraction under greater autonomy. The Bangsamoro peace agreement created a milestone of how far we can stretch the 1987 Philippine Constitution. However, sovereignty is not yet guaranteed by any contract signed in October 2025. It must be demanded, structured, monitored, and protected. Not later. Now. Before the drilling starts.

*The views expressed in the blog are those of the author alone. They do not reflect the position of the Saw Swee Hock Southeast Asia Centre, nor that of the London School of Economics and Political Science.

**Banner photo by Joedith Lego on Unsplash.

The post Peace Dividends: The Philippines’ Southern Gas Gamble first appeared on LSE Southeast Asia Blog.