In the South China Sea, diplomacy is often as turbulent as the waters themselves. Now, the Philippines wants to calm the storm with a legally binding Code of Conduct.

President Ferdinand Marcos Jr. has vowed to make this his regional legacy, pushing for rules that would prevent collisions at sea, halt island-building, and draw a line against coercion. “We will certainly try,” he said recently. But in a dispute where China holds the strongest hand and ASEAN often plays it safe, trying may not be enough.

For Manila, the timing looks bold on paper. It will chair ASEAN in 2026, a platform that can elevate its maritime quarrels into regional priorities. Yet power realities make the task Sisyphean. Beijing has brushed aside the 2016 arbitral ruling in favor of Manila’s claims, clinging to its “nine-dash line” as a historic entitlement. Signing a code that restrains its actions would mean surrendering leverage in contested waters it treats as its own. Few expect China to suddenly yield.

ASEAN itself is no easier. The bloc prides itself on consensus, but unity crumbles on the South China Sea. Four members—Brunei, Malaysia, Vietnam, and the Philippines—are claimants. The rest either sit out or lean towards China, whose trade and investment have become lifelines. Cambodia has often shielded Beijing’s interests within ASEAN forums; Laos, Myanmar, and even Thailand tread cautiously.

Political scientist Enrico Gloria of the University of the Philippines puts it plainly: “Everyone wants the COC finalized—but pushing for a legally binding version is a political lightning rod.”

That leaves Manila facing an awkward arithmetic: it must rally ASEAN behind a project some see as a provocation, while persuading China to accept constraints it has long rejected. Defense Secretary Gilbert Teodoro Jr. tried to frame the stakes: “Behind the formal statements lies a genuine concern—countries in the region are worried about what may or may not happen.”

The worry is real. Collisions between ships have become more frequent; economic activity, from fishing to energy exploration, is disrupted by intimidation; and the militarization of reefs is eroding faith in rules that once kept tempers in check.

The economic dimension is subtle but significant. Nearly a third of global trade flows through the South China Sea. Escalating tensions threaten not only regional security but also shipping routes and energy supplies.

Investors are watching closely. A binding code could, in theory, reassure markets that disputes will not spill into supply chain disruptions. Yet the more likely outcome is incremental progress—a stronger version of the 2002 declaration, couched in the language of peace and stability but short on enforcement. That would soothe some nerves without changing the balance of power.

Marcos himself has tempered his language, preferring pragmatism over confrontation. His “friend to all, enemy to none” stance recalls his first State of the Nation Address in 2022. Analysts say this cautious tone may help keep ASEAN talks alive. But it also signals that the Philippines, while determined to defend its waters, knows the limits of hardline diplomacy when it lacks hard power to back it.

As ASEAN chair, Manila’s challenge will be less about extracting concessions from China than about keeping the process afloat—avoiding deadlock while making the code seem credible. Malaysia has shown how to manage this balancing act, shepherding negotiations this year through five rounds across Southeast Asia and China. That may be Manila’s best model.

The Philippines’ push for a binding code is, at one level, a diplomatic gamble: a small power daring to demand rules from a super power. At another, it is a strategic narrative—an effort to frame the South China Sea not as a bilateral dispute but as a regional and even global security concern.

The question is whether others will buy in. For now, the binding code looks less like an imminent breakthrough than a mirage—visible, aspirational, but always retreating just out of reach.