China's Foreign Minister has announced plans for the two countries to explore the South China Sea together and says the situation is stabilising.
It comes just one year on from an international ruling which favoured the Philippines' sovereignty claim over China's in the disputed waters.
During bilateral talks in the Philippines this week, Chinese Foreign minister Wang Yi stood with his Filipino counterpart, Alan Cayetano, to announce plans to jointly explore the South China Sea for oil and gas.
"Joint exploration doesn't affect and involve each other country's independent legal systems. It is about the two sides making a common rule or reaching an agreement. "
The Philippines has promised to consult with other ASEAN nations before finalising the agreement.
But its Foreign Minister Alan Cayetano says the venture will benefit all member countries.
"The first tangible and easily seen product is the peace and stability not only in the West Philippine Sea and South China Sea, but in the whole region"
It's a dramatic turnaround from the tense relations just over a year ago, when an international arbitration tribunal at The Hague ruled in favour of the Philippines and against China's claims over much of the South China Sea.
While former Philippine president Noynoy Aquino took a hard line against China on the issue, current leader Rodrigo Duterte has increasingly aligned his country with Bejing, and away from the United States.
The shift away from the Philippines' traditional ally began after former President, Barack Obama, criticised Duterte over his controversial war on drugs.
China has already pledged approximately $3 million towards rebuilding cities affected by militia groups aligned with IS. Islamist violence in the southern Philippines.
Late last month China donated 3000 assault and sniper rifles to reinforce the Philippine military.
President Duterte hopes closer ties will translate into more Chinese investment and aid.
This is not only to strengthen our countries commitment to support each other in times of need, but highlights the dawn of a new era in Philippine Chinese relations."
Chinese foreign ministry spokesperson Lu Kang has commended Philippine efforts to deepen ties with China.
"For over a year, the cooperation between China and the Philippines has made many achievements as evidenced by frequent high-level exchanges, enhanced political mutual trust, active release of potential of pragmatic cooperation and restart of maritime dialog and cooperation between two countries. "18
Foreign Ministers from the ASEAN countries and China will meet in Manila next week, and try to endorse a draft code of conduct in the South China Sea.
China has urged Southeast Asia nations to unite - and "say no to outside forces" - namely US interference in the region.
