Introduction

When the Philippines took over the ASEAN chair in January, it made concluding a South China Sea Code of Conduct its top priority. With the 49th ASEAN Summit set for Metro Manila on 16–18 November, that goal looks increasingly out of reach. A second question hangs over the meeting: how far ASEAN should go in welcoming back Myanmar’s military-led government. How ASEAN handles both issues will show whether it can act as a bloc on security.

The code that keeps slipping

ASEAN and China agreed a non-binding Declaration on the Conduct of Parties in 2002. They have been negotiating a fuller Code of Conduct, on and off, ever since. According to the International Crisis Group, negotiators have yet to agree final text on any of the four most contested issues:

• the code’s geographic scope;
• whether it is legally binding;
• dispute settlement and enforcement; and
• military activity and the role of outside powers.

Relations between Manila and Beijing have also worsened during the year. Chinese coast guard and maritime militia activity around Scarborough Shoal is at record levels. Beijing sanctioned Philippine Defence Secretary Gilberto Teodoro in mid-2026. July marked the tenth anniversary of the arbitral ruling that rejected China’s sweeping maritime claims, a date Manila treats as highly symbolic.

Foreign Secretary Theresa Lazaro has lowered expectations. In June she said that “a bad CoC” would be worse than none. Crisis Group suggests the likely outcome is a face-saving formula: negotiations declared substantially complete, with the text sent for a long legal review.

There are some signs of de-escalation. An informal arrangement on resupplying Second Thomas Shoal has held since 2024, and there is talk of Xi Jinping attending the November meetings, which would be his first visit to the Philippines since 2018. The energy crisis has also renewed discussion of joint oil and gas development, although Manila remains wary.

Myanmar: shut out, but less so

Myanmar’s leader Min Aung Hlaing, elected president by a military-backed parliament in April after junta-run elections, has again not been invited to the leaders’ summit. ASEAN cites the regime’s failure to meet the Five-Point Consensus, including on a ceasefire. Myanmar was represented at the Cebu summit in May by a senior foreign ministry official.

The line is softening. In July, ASEAN foreign ministers met the junta’s new foreign minister in Bangkok, the first such in-person meeting since the 2021 coup. Thailand, Vietnam, Laos and Cambodia favour ending Myanmar’s isolation. Critics argue that giving the regime legitimacy before it meets any conditions will leave ASEAN with little leverage.

What it means for business

For companies in shipping, offshore energy, fisheries or marine insurance, a code that is announced but not implemented is not much better than no code. Maritime risk in the South China Sea will continue to be priced as a chronic condition, not one that is close to resolution. The 16th ASEAN Maritime Forum, on 17 November, will show whether any practical measures, such as incident hotlines, are agreed.

On Myanmar, a gradual return to ASEAN does not change sanctions exposure, which is set mainly in Washington, Brussels and London. It may encourage more regional trade and investment from neighbouring states, which raises compliance risk for multinationals whose partners deal with Myanmar.

Summary

The Philippines is unlikely to secure a substantive South China Sea code before its chair year ends, and a symbolic announcement is the more realistic outcome. ASEAN is still excluding Myanmar’s leader but is slowly re-engaging. For business, the Manila summit is more likely to confirm existing risks than to remove them. Maritime and Myanmar exposures should be managed on that basis.