MANILA- A United Nations arbitration ruling that invalidated China's sweeping claims in the South China Sea serves as a "bargaining leverage" for the Philippines, Malacañang said Friday.

Presidential Spokesman Salvador Panelo denied that the United Nations-backed ruling is useless, saying it gives Manila an edge over Beijing.

"Meron kaming bargaining leverage...Kung wala yun [arbitral ruling], wala tayo, wala kang ibibigay na, 'anong basis bakit kayo nandito?' Kaya hindi rin useless. Kaya lang, ang problema nga ay iyong enforcement," he said.

(We have a bargaining leverage. If we didn't have that arbitral ruling, we can't say 'what is the basis of your presence here?' It's not useless. The only problem now is the enforcement of the ruling.)

Given Manila's closer ties with Beijing under President Duterte, Panelo said the Philippines can deal with China through "friendly negotiations" since the economic giant refuses to recognize the tribunal ruling.

"What we cannot get from the arbitral ruling through force or enforcement, we can get through friendly negotiations," he said.

The Philippines in 2016 defeated China in the Hague-based international tribunal after the court invalidated Beijing's sweeping nine-dash line claim over the South China Sea.

The ruling, which Beijing refuses to recognize, was handed down at the start of President Rodrigo Duterte's term.

Critics have slammed Duterte for refusing to flaunt the Philippines' arbitral victory in exchange for closer ties with Asia's economic superpower.

Duterte on Thursday said Chinese President Xi Jinping once warned him of "trouble" should Manila decide to pursue oil exploration in the West Philippine Sea.

• Xi warns of ‘trouble’ if Filipinos start exploring West PH Sea for oil, says Duterte

Panelo said Duterte is "making his enemies his friends" for the mutual benefit of the Philippines and China.

"He is making his enemies friends so that both sides will mutually gain benefit from whatever they have," he said.