Shaina Neil Paula C.

Ramos March 24, 2018

International Political Economy Mr. Jumel G. Estrañero
AB Foreign Service/FS301

The Political Economy of the Philippines on its Sabah Claim

ABSTRACT

The purpose of this research is to determine the importance of history between

Philippines and Malaysia and its relations. Sabah as it was formerly known as North
Borneo used to be part of the territory of the Sultanate of Sulu. Sabah was ceded to the
British North Borneo Company in 1878 by the Sulu Sultanate and upon independence.
The Sultan of Sulu claimed that Sabah has always been part of his kingdom. To whom
does Sabah belong?
 INTRODUCTION

This chapter shows the significance that historical events can have on current
economic development. Over the past decades historical purpose has been
documented in a wide variety of time periods and locations.

The Philippine-Malaysia dispute over Sabah is a never ending diplomatic issue

and it had been dealt with by diplomats, presidents and congressmen. The Department
of Foreign Affairs was responsible for the search of the State's foreign policy. The
Sabah issue involves a historical and legal claim and it has been a festering sore in
Philippine-Malaysian relation for almost a century. Sabah should be incorporated as
part of the areas to be studied in Philippine history or in the history of Sulu and
Mindanao. The dispute is not just about maps and national pride, but also about a
nation’s exclusive rights to natural resources. Furthermore, it is important to know that
territorial disputes remain very dangerous, but it appears that certain quarrels are more
dangerous than others.

The Philippine claim to Sabah has been an irritant in the country’s relationship
with Malaysia the claim has been dormant for years until now. The bilateral relationship
of the two countries has already spanned 61 years. The Philippines relations with
Malaysia are able to remain strong, economically and culturally, regardless of several
issues like the Sabah claim. Some Filipinos in the Sulu area of the Philippines insist that
Sabah, a state rich with timber and oil, had belonged to their royal sultanate for more
than a century and should be handed back.

Malaysia is one of the top 5 countries with the largest population of overseas
Filipinos. There are at least 790,000 Filipinos living and working in Malaysia, while there
are an estimated 673,000 Malaysians in the Philippines. There are many Filipino
residents in Sabah, as well as illegal immigrants there. Filipinos make up about 30% of
the entire population of Sabah and they enumerate up to 900,000. Many Filipinos in
Sabah come to work in construction industries, fisheries, and other labor intensive
sectors for a better living. Many Filipino refugees’ concern is the lack of consistency of
identity documentation issued to the Filipino refugees, and application of procedures for
obtaining these documents. The standard of living for many Filipino refugees remains
below the poverty line. A lot of Filipino refugees have limited or no access to clean
water and electricity. In order to survive, they are engaged in very low level paying jobs.
 STATEMENT OF THE PROBLEM

The study will determine the importance progress that helps the claimants of
Sabah and the Philippine on the past administrations, the effect of the issues between
the lives of Filipino and Malaysian and the plans and progress of Sabah claims on the
Duterte’s administration.

Specifically, it sought to answer the following questions:

1. What are the significant progress that helps the claimants of Sabah and the
Philippine on the past administrations?

2. What has been the effect of the issue between the lives of Filipino and
Malaysian?

3. What are the plans and progress of Sabah claims on the Duterte’s
administration?

METHODOLOGY

This chapter represents the historical development of research method. The

historical source of research method shows that the principle of historicity always is very
important. It comprises the techniques and guidelines by which historians use primary
sources and other evidence and to research and then to write histories in the form of
accounts of the past.

Historical Development

This method will help us to understand how reformation has developed. With this
understanding historical research will also benefits everyone. The purpose of this is to
preserve and interpret facts. It involves examining the past events to show conclusions
and make predictions about the future.
 REVIEW OF RELATED LITERATURE
It presents all the significant local and foreign literatures and studies that the
researcher gathered for an in-depth understanding of the research topic.

Geographical Location of Sabah

The distance between Sabah and Philippines is 1083 KM (kilometers) and 800.73
meters. The miles based distance from Sabah to Philippines is 673.4 miles. This is a
straight line distance and so most of the time the actual travel distance between Sabah
and Philippines may be higher or vary due to curvature of the road. Philippines is
located closely south side to Sabah. (Distance between Sabah and Philippines)1

The Origin of the Name Sabah

Based on (Ken , 2015)2 the origin of the name Sabah is unclear one theory is that
during the time it was part of the Bruneian Sultanate, it was referred to as Saba’
because of the presence of pisang saba, a type of banana, found on the coasts of the
region. Due to the location of Sabah in relation to Brunei, it has been suggested that
Sabah was a Bruneian Malay word meaning upstream or the northern side of the river.
Another theory suggests that it came from the Malay word sabak which means a place
where palm sugar is extracted. Sabah is also an Arabic word which means morning.
The presence of multiple theories makes it difficult to pinpoint the true origin of the
name.

Sabah as part of Sultanate of Brunei

As reported by (McGeown, 2013)3 "the Sultan of Brunei gave Sabah to the Sultan of
Sulu - either as a dowry or because troops from Sulu had helped him quell a rebellion.
More than 350 years later, the sultan's heirs have come to remind Malaysians that they
still consider Sabah to be part of Sulu and, by extension, part of the Philippines.” The
Sultan of Sulu at that time claimed that he was asked by Brunei to help and was

1
Sabah To Philippines Distance, Location, Road Map and Direction
http://distancebetween2.com/sabah/philippines
2
The Name Of Sabah and the Sustaining Of a New Identity in a New Nat...Ken -Danny Tze -
http://journals.openedition.org/archipel/495
3
How Do You Solve a Problem Like Sabah? Kate McGeown – http://www.bbc.com/news/world-asia-
21545162
promised eastern Sabah as a reward. As promised, the Sultan of Sulu received eastern
Sabah as an honorary gift from the Sultan of Brunei, for the Tausugs' help during the
civil war."

Sabah and the Royal Family of Sulu

The seat of The Royal Sultanate of Sulu is in Astana Putih, Tausug for “White
Palace,” located in the southwest of the Spanish Walled City of Jolo, in Umbul Duwa at
the present municipality of Indanan in Jolo Island. Jolo is the capital town of the
Province of Sulu that is within the present geographical jurisdiction of the Republic of
the Philippines. (Ang)4

As documented by (Aguinaldo, 2013)5, Sulu Sultan Jamul Kiram III experienced the
luxurious life when he was a kid. The royal family is not allowed to walk on their feet
because they believed that when you step on the ground you will have a sick. Back then
the Sultan is known as king and the most powerful, besides gold one of his treasures is
the North Borneo or what we called Sabah. The unity of the sultan and his siblings is the
reason why they are stable against the fight in Sabah. However, the Sultan of Sulu
considered himself as one of the poorest Sultan in the world.

Sabah as British North Borneo Company

Many had thought that North Borneo belonged to the sultanate, that the transaction
had been only a lease, which the North Borneo transaction had recognized the sultan’s
sovereignty and the British government had no right to take over the territory. The Sulu
claim to sovereignty over North Borneo was the government’s recognition of a sultan.

According to (Alunan, 2012)“The British North Borneo Company based their rights
from the grant signed in January, 1878. The sultan of Sulu granted certain concessions
and privileges to Baron de Overbeck, an Austrian national who was at the time the
Austrian Consul-General at Hongkong, and Alfred Dent, a British national, in
consideration of an annual rent or tribute of 5,000 Malayan dollars. Dent later bought
out Overbeck, and transferred his rights to the British North Borneo Company.”

Macaskie considered the claim of the Philippines government as successor in

sovereignty to the money. He did not consider the question of sovereignty in North

4
Historical Timeline of the Royal Sultanate of Sulu Including Related Events of Neighboring Peoples
http://www.seasite.niu.edu/Tagalog/Modules/Modules/MuslimMindanao/historical_timeline_of_the_royal.htm
5
I-Witness: "Haring Walang Kaharian"
https://www.youtube.com/watch?v=n8VeBjEGZvw
Borneo. The British representatives failed to project this position because their
arguments were completely at variance with the facts of history. The Philippine
government was admitting something of the British argument by allowing for claim of
self-determination. (Tarling)

The claims are of sovereignty, jurisdiction, and proprietary ownership to North

Borneo. Philippines being successor in interest of the Sultan of Sulu derived its legal
and historical rights in North Borneo. Aside from the strong historical and legal rights
that North Borneo is important to Philippine territory and vital to its security. There was
an issue between the signing of the contract was for a lease or a cession. The British
version of the treaty says that “hereby grant and cede.. all the territories and lands being
tributary to us on the mainland of the island of Borneo while the Sulu version says, “do
hereby lease of our own freewill… forever and until the end of time, all rights and
powers which we possess over all territories and lands tributary to us on the mainland of
the Island of Borneo. Even today, Malaysia pays about 5,300 Malaysian ringgit or 73,
000 Philippine peso a year to the Sultanate of Sulu. (Tombung, 2013) The Philippines
claims that Sabah was only leased not ceded, to the British North Borneo Company.
The heirs of the Sultan of Sulu continue to receive lease payments for Sabah (Romero,
2016) 6

Argument between Sulu Family

Based on the interview of (Aguinaldo, 2013)7 to Sultan Jamul Kiram III (2013) his
message to the Malaysian government “they need to come over we can sit down and
talk probably in a neutral place in Asia”

As reported by (David, 2013) “Sulu Sultan Jamalul Kiram III’s decision is to send his
royal army to reclaim Sabah as part of the Sulu “homeland.” Like the other royal
families of Sulu, the Kiram heirs most likely still own huge areas of land in Sulu. Still,
one can assume that a big portion of the land in these parts belongs to the ancestral
domain of the people of Sulu and remains public. According to Pres. Aquino, “I am not
aware that any of the royal families has any pending private claim to the entire island.
Ownership is not the main issue in Muslim Mindanao.

6
Sabah Claim: A Tale Of Two Versions
http://www.freemalaysiatoday.com/category/opinion/2013/03/08/sabah-claim-a-tale-of-two-versions/
7
I-Witness: "Haring Walang Kaharian"
https://www.youtube.com/watch?v=n8VeBjEGZvw
Review of Former President’s Involvement on the Sabah Claim

(Panganiban, 2013)8 Says in his report during the time of Diosdado Macapagal the
Philippine government had formally filed a claim to Sabah. Malaysia, in an effort to help
the Philippine government resolve the secessionist problem in Mindanao, acts as
negotiator and mediator between the Moro Islamic Liberation Front and the Philippine
government. However, the Sabah dispute still remains. In 1950, Macapagal, then a
congressman together with other colleagues filed a resolution for the pursuance of the
claim by the government. On July 1963, the resulted in signing the three documents
namely Manila Accord, Joint Statement and the Five-Point Manila Declaration that
started the MAPHILINDO or Malaysia, Philippines, and Indonesia.

Under the Marcos administration, the successor of Macapagal it is also the time of
Marcos when the ASEAN or the Association of Southeast Asia was born. Many have
claimed that President Marcos is the only President of the Republic of the Philippines
who really meant to claim Sabah for the Philippines. He is still pushing for the United
States to support the Philippines on the Sabah Claim. He wants to use this issue as a
platform for the Administration and he wants to show the world and the Filipino people
that he is in total control of the dispute and he can play it anytime he wants. (Laurel) In
Aquino’s administration the 1987 constitution came also a new government position on
the Sabah claim. There is an issue that President Aquino filed a bill that she would drop
the claim but luckily she received strong disapproval in the congress. (Bretagne, 2016)9

During the Ramos administration the relation between Philippines and Malaysia was
developed, he was also known by many as the leading salesman of the Philippine
industry. He also continued to seek to improve the relations between the two countries.
In the time of President Gloria Arroyo she signed the new law on the archipelagic
baselines of the Philippines. This law was supported in 2011 by the Supreme Court,
which categorically stated that the Philippines keep its claim to Sabah. (Dañguilan-
Vitug, 2013)

8
Understanding the Sabah Dispute Artemio Panganiban -
http://opinion.inquirer.net/47997/understanding-the-sabah-dispute

9Operation Merdeka, Sabah and the Philippines (1968) Thewalkingencyclopedia -

https://thewalkingencyclopedia.wordpress.com/2013/03/07/operation-merdeka-sabah-and-the-philippines-
1968/
 President Aquino maintained the Philippines and its claim over Sabah during his
term by saying the agreement signed in 1878 between the Sultan of Sulu and the North
Borneo Chartered Co. was only a lease and did not strip the country of its sovereignty
over the area. (Calica, 2015)10

Our current President Rodrigo Duterte said he would stick to the administration's first
stand on the Sabah issue. He also said that he would recognize the claim of the
sultanate of Sulu, which used to rule over parts of southern Philippines and Sabah,
before the British government transferred Sabah to the Federation of Malaysia in 1963.
He also added that they need to talk only through peaceful means for the reason that
we don’t have the luxury of getting into trouble or another war, we just have to talk to
everybody to develop our country. (Duterte vows to pursue Philippine claim to Sabah,
2016)11

Sabah’s Economic Status

As said by (Lo, 2017) that over the last 10 years, Sabah has made impressive
progress in many ways. The government and administrative system is working very well
as confirmed and reaffirmed over the years by the latest auditor-general’s reports. A
well-managed government and administrative system is the foundation stone on which
we can continue to build the future of our state. A system must include a sound and
solid financial management of Sabah’s budget, revenue, expenditure and most
importantly, state reserves. Sabah must have a strong financial base as, without it, we
will depend on charity for survival. As mentioned by (Inus, 2017) Sabah is expected to
maintain a stable GDP growth momentum of between four and 4.5 per cent this year, on
the back of recovery prospects for commodity prices and the global economy in general.

10
Pnoy: Ph Won't Give Up Sabah Claim ABS-CBN News-Aurea Star - http://news.abs-
cbn.com/nation/05/17/15/pnoy-ph-wont-give-sabah-claim

11
Duterte: Ph Gov't Position on Sabah Remains Dharel Placido- ABS-CBN News - http://news.abs-
cbn.com/nation/regions/05/31/16/duterte-ph-govt-position-on-sabah-remains
Recent Issue in Philippine-Malaysia Relation

As reported by (Chew, 2018) Malaysia rejected the proposal made by Mr. Aquilino
Pimentel Jr. he is a member of the Philippines’ Consultative Committee to improve the
Philippine Constitution to include Sabah as the "13th federal state" of the Philippines.
His proposal for the new federal government includes 12 federal states - Northern
Luzon, Central Luzon, Southern Luzon, Bicol, Eastern Visayas, Central Visayas,
Western Visayas, Minparom, Northern Mindanao, Southern Mindanao, Bangsamoro,
and Metro Manila. He also said that the government can add Sabah as the 13 th federal.

Current Issue of the Filipinos in Sabah

(Tombung, 2013) said that Sultan Jamalul Kiram can no longer trust the Philippine
government in his claim on Sabah because Philippine government has been
inconsistent in its claim and on its recognition of the Sulu sultanate. The Malacañang
Palace has been making decisions on these issues based on changing political
climates. (Gavilan, 2016) says one of the problems between the two countries is the
number of Filipinos illegally staying in Malaysia. The Philippine embassy said that the
number of undocumented Filipino workers in Malaysia is 93,000. There are many
factors why Filipinos wants to go to Sabah one of the main reason is the Malaysian
Ringgit is more powerful than Philippine Peso, Malaysia has less than half
unemployment rate as compared to the Philippines and inflation is lower. The quality of
life in Malaysia is better than in Philippines, there are more job opportunities and high
salaries. For several years now, some Filipinos in Sabah has made a living as an
itinerant street vendor and selling smuggled goods and most of them live in stilt slums
scattered behind cities or on offshore island.
 PRESENTATION, INTERPRETATION & ANALYSIS OR PAID

1300- 1700- 1900-

1400 1800 2000 2010-Present

1600- 1800- 2000-

1700 1900 2010

1300-1400
The Tributary trade missions occur from the Philippines these trade missions
compete for Chinese trade attention. At that time the Southern Philippine polities
(Maguindanao, Sulu, and Kumalalang) were competing for dominance along the
Southern South East Asia trade routes. An initial trade mission successfully launched
the Sulu polity as a significant player in early Ming southern spice trade.

1600-1700
At that moment the Sultan of Brunei cedes Sabah to the Sultan of Sulu in
compensation for his help in settling a civil war in the Brunei Sultanate. Brunei Sultan
Abdul Hakkul Mubin awarded the northeast coast of Borneo (Sabah), including
Palawan, to Sulu Sultan Salah ud-Din Karamat Bakhtiar for helping settle a civil war
dispute against Pengiran Bongsu Muhyuddin. Then the Brunei Sultan Bongsu
Muhyuddin, upon ascending to the throne, confirms the Sultan of Sulu as sovereign
landowner of the territories of North Borneo and the island of Palawan.

1700-1800

At this time there is no document stating the grant of North Borneo from Sultan of
Brunei to Sultan of Sulu, but it is accepted by all sides Treaty of alliance between Spain
and Sultan Azim Ud-Din invoked by Sulu. Alexander Dalrymple, Deputy Secretary of the
Madras Council of the East India Company signs Articles of Friendship and Commerce
with Sultan of Sulu Muiz-ud-din Bantilan granting land for a factory; granting
extraterritorial legal rights to the English; granting trade monopoly to British; and
establishing alliance. Sultanate of Sulu cedes the island of Balambangan to British East
India Company.
1800-1900

Sulu Sultan Jamal ul-Alam leases North Borneo to the Hong Kong-based British
trading company of Baron Gustavos von Overbeck and Alfred Dent and confers upon
Overbeck the title Datu Bendahara, Raja of Sandakan. The United Kingdom establishes
protectorate over North Borneo. Sir Alfred Dent obtains sovereign control over the
northern part of Borneo for 5,000 ringgit from the Sultans of Brunei and Sulu.

1900-2000

In 1990, British North Borneo Company gets from Sultan of Sulu even more
territory. The additional 300 Malasian dollar a year paid for a confirmatory
deed stipulating that certain islands not specifically mentioned in the Deed of 1878 had
in fact been always understood to be included therein. On December 18, 1939, a group
of heirs of the Sultan filed suit against the Government of North Borneo and the British
North Borneo Company for the recovery of the stipulated annual payments. The High
Court of the State of North Borneo, through Chief Justice Macaskie, rendered judgment
in favor of the heirs. By the time of January 22, 1958, the heirs of the Sultan of Sulu
issue a proclamation declaring the termination of the lease contract over the territory in
question effective. President Diosdado Macapagal files the Philippines' claim over
Sabah with the United Kingdom. The relations improved between the Philippines and
Malaysia during the time of Marcos Administration, but the dispute over Sabah was not
formally settled while former President Corazon Aquino and Fidel V. Ramos continue to
seek to improve relations between the two countries.

2000-2010

During the time of Former President Gloria Macapagal Arroyo she visits to
Malaysia and asks the Vice President and Foreign Affairs Secretary Teofisto
Guingonato set up an economic and cultural office in Sabah. ARMM Governor Nur
Misuari ordered his troops to wage rebellion. He escapes to Malaysia. Malaysian
government extradites him back to the Philippines. Some of the heirs meet in
Malacañan Palace at the invitation of President Gloria Macapagal-Arroyo. On 2006,
Mohammad Fuad Abdulla Kiram I was proclaimed 35th Sultan of the Royal Hashimite
Sultanate of Sulu and Sabah with a backing of the Moro National Liberation Front.
2010- Present

On February 2013, Followers of Jamalul Kiram numbering over 200 men landed
in Laha Datu village in Sabah. According to (Macleod, 2018)12, that Duterte is the first
president from the southern region of Mindanao, has long been a proponent of
federalism, which he claims will redress the balance of power between Imperial Manila
and local governments, through local courts, business regulations and taxes. He has
previously declared his intentions to pursue the country’s claim on Sabah. These
declarations generate political support from Muslim groups in the South who believe
Sabah should be included within an independent ‘Bangsamoro’ (Muslim nation) region.

12
Philippine Claim on Sabah Will Undermine Regional Security Efforts |gri
https://globalriskinsights.com/2018/02/philippine-claim-on-sabah-will-undermine-regional-security-efforts
 SUMMARY

Conclusion

In conclusion, the claim started during the time of Macapagal and continued
during the time of Marcos and followed by the next presidents. The Philippine and
Malaysian government is still on the struggle over their claim of Sabah. Philippines and
Malaysia have maintained close ties despite testy diplomatic relations over Sabah,
which voted to join the Federation of Malaysia in 1963. Because of the connections
between people living on both sides of the border, illegal immigration, incidents of cross
border raiding and kidnappings have become a commonplace. Malaysia’s stand on the
dispute is simple, they believe that there is no dispute, seeing as Sabah was one of the
13 states that signed onto the Malaysian Federation in 1963. If the Philippines lose its
case, the damage to the honor and respect of our Republic would be countless and if
the Philippines win its case, we stand to gain nothing because under the United Nations
charter, we have to give up our rule and administration to the portion of North Borneo
we are claiming, grant its people self-government or independence and respect their will
and wishes as to whether they will join the Federation of Malaysia as a separate
independent state.

Recommendation

The Philippine government should decide whether to recover its dormant claim
over Sabah while considering “political realities” in the region, before entertaining
proposals to include the Malaysia-administered region as a state in the proposed
federal set-up. It should be the concern of the Philippines and of all countries whose
peoples believe in the free and democratic way of life, to see to it that North Borneo, are
not only speedily decolonized and independence, but also adequately safeguarded
against the danger of communist access and rebellion once they become self-governing
or independent.
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