Despite dealing China a stunning setback over his country’s competing claims in the South China Sea, Philippine President Rodrigo Duterte has stuck to his pledge to not "flaunt or taunt" the international court ruling.

Duterte responded to the landmark ruling by the Permanent Court of Arbitration in The Hague by huddling with his cabinet in a meeting that Secretary Vitaliano Aguirre said was characterized by a mood of “subdued victory.” On Thursday Foreign Secretary Perfecto Yasay said he would discuss the Philippines’ “peaceful and rules-based approach on the South China Sea and the need for parties to respect the recent decision" at the Asia-Europe Meeting starting Friday in Ulaanbaatar.

The response shows the challenge the new president faces in balancing calls at home for a strong reaction without expending goodwill from China. The case was brought to The Hague by Duterte’s predecessor, Benigno Aquino, who before leaving office June 30 became one of the most vocal critics of China’s efforts to assert its claims in the South China Sea.

QUICKTAKEPhilippines' Path

“Duterte will also be under greater domestic and international pressure to publicly oppose present Chinese actions that limit Philippine maritime rights in their exclusive economic zone," said Malcolm Cook, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore. “Nuanced diplomacy -- a rare skill the new Duterte team has yet to display -- will be needed for the Philippines to leverage this ruling into better relations with China and support at home.”

Strong Position

About 80 percent of Filipinos supported the government’s efforts at the tribunal, according to a survey conducted by the Social Weather Stations in March and only released this week.

Solicitor General Jose Calida will provide Duterte a “complete and thorough interpretation” within days, a cautious approach that buys time and reduces the possibility of antagonizing its biggest trading partner. While Duterte has said he is open to bilateral talks, and China has said it hopes to return to direct negotiations, Beijing has also vowed to completely ignore the ruling.

"Even the Philippine government was surprised with the ruling," said Peter Jennings, executive director of the Australian Strategic Policy Institute in Canberra. "So, the response is appropriate enough at this point. It won’t help in the Philippines’ position if it is seen gloating after the outcome."

For an explainer on territorial issues in the region, click here.

Jennings said the Duterte administration would need to tread carefully to capitalize on its position of strength. Consulting fellow members of the Association of South East Asian Nations and other like-minded countries would be an important step.

Final, Binding

As Duterte kept mum on the decision, Aquino said it brought the Philippines closer to achieving a permanent solution to the dispute, while his Foreign Secretary Albert del Rosario said the ruling was final and binding.

“With this legal advantage, the chief diplomat and architect of our foreign policy, President Rodrigo Duterte, can now proceed with the necessary tools at his disposal to get the job done,” Francis Jardeleza and Florin Hilbay, former solicitors general who defended the case, said in a statement.

Defense Secretary Delfin Lorenzana said he had assured his U.S. counterpart, Ash Carter, that the Philippines would exercise caution in its response to the Hague ruling in a phone call Sunday. Lorenzana said Carter told him both the U.S. and China would show restraint. "I told him we will also exercise restraint," he said.

With Philippine officials studying the almost 500-page ruling and digesting its full implications, Ian Storey, another senior fellow at the ISEAS-Yusof Ishak Institute, said he expected a measured response from the Duterte administration, including the offer of talks.

"It is not surprising that the Duterte administration has adopted a cautious
approach to the ruling," Storey said. "However, given that the ruling represents a stunning defeat for China, Beijing might not be in a mood to talk with Manila, especially as bilateral talks might be viewed by nationalists in China as an admission of defeat."