This sort of vassalage is anathema to the US and China-hawk and pro-US elements in South East Asia, and the UNCLOS ruling is an important step in efforts to cripple the PRC as a positive and significant economic force—and supplier of attractive economic-friendly “security goods” like lighthouses, coast guard fleets, and so on—in the South China Sea.
In other words, the whole South China Sea megillah, in my opinion, is about rolling back the PRC’s influence in Southeast Asia by limiting the geopolitical leverage it might have obtained from being the big guy in the SCS.
Game not over, but it appears likely that the PRC’s influence down thataway has peaked and its efforts will move the other way: trying to prevent the US from playing the same game in the other direction and tilting the various powers down there in a pro-US/anti-China direction.
Gonna be tough.
The pivot dynamic is favored by confrontation and polarization, and the UNCLOS ruling provides plenty of opportunity for that as the Philippines and everybody else study how to exploit the PRC's vulnerability and claim their EEZ rights. Japan may also add some gasoline to the fire by pursuing UNCLOS arbitration over a gas field development beef in the East China Sea.
There’s also a nice opportunity for a regional war in the mix, thanks to the PRC’s apparently ill-conceived move to island-build Mischief Reef and Subi Reef on top of non-LTE features. Per the UNCLOS ruling, these are now illegal man-made structures inside the Philippines EEZ and the Philippines is within its right to demand that the PRC vacate them.
If the Philippines seized those structures and the PRC tried to get them back, I think that would probably trigger the Philippine-US Mutual Defense Treaty. The MDT is intentionally sketch on backing the Philippines in offensive operation outside its sovereign territory, but it does stipulate that the US will come to the defense of Philippine forces under attack.
And, quite frankly, in the current atmosphere the US might be happy to fudge interpretation of events and the MDT enough to intercede on behalf of a Philippine expeditionary force if it made a play and encountered PRC resistance.
The China hawks are already fleshing out these scenarios in consultation with their allies in the Manila establishment, I expect.
So, as I wrote over at AT, the PRC isn’t leaving the SCS…but the job of staying there just got a lot harder and more expensive.