The chapter examines the circumstances and events leading up to the 2016 arbitration and its effects, both positive and negative, and analyzes the positions and arguments of both China and the Philippines before and after the arbitration. The arbitration clarifies that China’s claim over the Nine-Dash Line has no legal basis, which sets a precedent for other claimants. Despite the heightened tension between the Philippines and China over the arbitral ruling, the status quo on the SCS has not changed significantly. Moreover, other domestic priorities of the Duterte administration have emphasized improving ties with China, especially economic aid and infrastructural development assistance.