China refused to withdraw its vessels from surrounding waters of a disputed island in the South China Sea, in a move that could lead to the Philippines ‘losing’ 38% of its territorial waters.

“In a subministerial consultation, Chinese Vice Foreign Minister Fu Ying had said to our people that China’s presence was permanent and they had no intention of withdrawing their ships from the vicinity of Bajo de Masinloc,” Foreign Secretary Albert del Rosario said, referring to the Scarborough Shoal by its local name.

Three Chinese ships have been stationed near Scarborough Shoal since the standoff with Philippine vessels in April 2012, despite protests from Manila.

“Our ships withdrew from Bajo de Masinloc in June and (we couldn’t) access the area, the shoal became under virtual occupation by China,” said Lauro Baja, the former foreign undersecretary and former Philippine Permanent Representative to the United Nations.

The government is weighing options on how to approach the territorial dispute: the military option or the legal option. The former out of the question considering the inferior state of the Philippine Navy compared to China’s increasing military might, according to VERA Files.

Legal experts said the Philippines could protest to the United Nations International Tribunal on the Law of the Sea to declare the shoal as a rock rather than an island.

Republic Act 9522, which defines the Philippines’ archipelagic baseline, claims the Scarborough Shoal as part of Philippine territory and is classified as a “regime of islands” which generates its own territorial sea, exclusive economic zone and continental shelf.

Under this definition, the Chinese claim over Scarborough Shoal means the Philippines risk losing the 120-sq km vital reef formation as well as 494,00 sq km EEZ or 38% of the country’s EEZ.

Rocks as defined by the UNCLOS “cannot sustain human habitation or economic life of their own” and therefore “shall have no exclusive economic zone or continental shelf”.

Retired Philippine Navy Commodore Rex Robles declared the shoal “is a rock” after visiting the area. “It cannot support human life. It is not an island,” he said.

“We are reviewing all our options in accordance with our three track approach encompassing the political, legal and diplomatic means,” Del Rosario said.