China-Philippines Territorial Dispute in the South China Sea

Key Judgements

Tensions continue to rise in the South China Sea as China and the Philippines remain entangled in a maritime dispute amid legal standoff. The turn of the new year saw Filipino Coast Guard assets facing off a Chinese research vessel off the coast of northern Cagayan province, with China most recently driving away a Philippine aircraft over the disputed Scarborough Shoal. As the Philippines adopts an increasingly defensive posture towards China, continued incursions into contested waters risk escalation, almost ten years after the Permanent Court of Arbitration dismissed China’s territorial claims in the region.

Objective

This report addresses recent evolutions in maritime contestation between China and the Philippines in the South China Sea, seeking to understand the progression of hostile interceptions and legal challenges against a backdrop of shifting regional postures in foreign policy.

Context

China and the Philippines have been locked in a dispute over maritime boundaries for some time, with China claiming long-standing access to waters outlined within its 1947 formulation of what would become the “Nine-Dash Line,” whilst the Philippines argues adherence to an international consensus of Exclusive Economic Zone sovereignty. Philippine claims rest on the UN Convention on the Law of the Sea (UNCLOS) framework – stating a nation retains sovereign access to waters within 200 nautical miles of their land. The resource-dense area has since experienced clashes amongst fishing vessels and coast guard ships of both nations, with the emergence of artificial islands representing the most recent escalation of posturing in the region. China has rejected the Hague’s 2016 Court of Arbitration ruling dismissing its territorial claims in the area, favouring informal historical narratives in support of its strategic ambitions. The region continues to garner international attention as US military bases in the Philippines represent a critical superpower stronghold in a period of great power competition across the Pacific.

Timeline

• 20^th January – China reports that it intercepted and escorted a Philippine aircraft away from the Scarborough Shoal area.
• 19^th January – Filipino President Ferdinand Marcos Jr. announces that the Philippines has made its first gas discovery in more than a decade approximately 50 miles northwest of Palawan province.
• 15^th January – The Philippines and Japan sign two defence pacts, incorporating shared supplies and services as well as funds to support the building of facilities to house naval vessels donated by Japan.
• 30^th December – A Chinese research ship is challenged by the Philippine Coast Guard around 19 nautical miles off the coast of northern Cagayan province, home to one of the nine military bases open to US forces.

Analysis

As the Philippines officially assumed chairmanship of the Association of Southeast Asian Nations (ASEAN) in late 2025, the position offers President Marcos Jr. with the opportunity to concentrate international attention on the dispute and bolster its own support. As Japan and South Korea step up resistance operations to Chinese incursions, the strengthening of bilateral agreements such as the Acquisition and Cross-Servicing Agreement with Japan serve to present a united front against China. The Philippines will seek to advance its legal argument as it prepares a second legal case against Beijing for environmental damage in the West Philippine Sea. Both Chinese ambassador to the Philippines Jing Quan and Filipino Foreign Minister Ma. Theresa Lazaro have expressed willingness to resolve the dispute by the close of 2026, as the negotiations for a “road map” scheduled for the first quarter of the year nears. China will be intent on refusing to cede its claims as other South-East Asian nations monitor the situation closely in light of their own maritime disputes with China. The issue provides the Philippines with increased opportunity to gain strategic alliances in the region and leverage US political muscle as tensions in Taiwan continue, all whilst drawing itself closer to confrontation with its biggest trading partner. Should the Philippines continue to refuse acceptance of China’s overseas ambitions, the US-led bloc will find opportunity in reinforcing its economic and military posture in the region.