This article examines how China's soft-power diplomacy has dramatically improved Philippine-China relations, a scenario unthinkable ten years ago. Since 2005, the two countries have significantly increased bilateral trade and investment relations as well as conducted close and intense security cooperation. Such developments in bilateral relations have been initiated by China to serve its changing strategic interests in Southeast Asia. Arguably, the general improvement in Philippine-China bilateral relations is part and parcel of China's efforts to shape Southeast Asia's view of its emergence and to apply soft power to erode American strategic preponderance and influence in the region. However, despite its growing economic and political ties with Beijing, Manila has not totally succumbed to China's soft-power diplomacy. Instead of jumping on the Chinese bandwagon, the Philippines continues to foster closer political/security ties with the United States and Japan to balance China's growing political and economic clout in Southeast Asia.