Malaysia handed over the chairmanship of Southeast Asia's regional bloc to the Philippines on Tuesday, with territorial disputes in the South China Sea set to dominate its agenda when Manila takes charge in 2026.

Prime Minister Anwar Ibrahim, who will remain chair of the Association of Southeast Asian Nations (ASEAN) until the end of the year, symbolically passed the gavel to Filipino President Ferdinand Marcos at the close of a summit in Kuala Lumpur.

"On the first day of 2026, ASEAN will begin a new chapter," Anwar said.

The Philippines is one of four ASEAN member states, along with Brunei, Malaysia and Vietnam, that have contesting claims in the South China Sea linking the Indian and Pacific Oceans.

This has put them at odds with China, which has its own sweeping assertions of sovereignty over the strategic waterway despite an international ruling in 2016 concluding this has no legal basis.

Tensions between Beijing and Manila have been particularly fraught, with maritime confrontations occurring regularly.

"The South China Sea only becomes an area of focus when incidents on the ground heat up... and they have been heating up," a Southeast Asian diplomat told AFP at the ASEAN summit, speaking on condition of anonymity.

ASEAN and China have been negotiating a code of conduct to regulate behaviour in the contested maritime area, aiming to secure an agreement by next year -- more than two decades since the idea was first proposed.

Marcos told the Kuala Lumpur summit that "there are positive outcomes to be gained if we commit to cooperation and meaningful engagement, especially in the South China Sea."

But Manila-based geopolitical analyst Don McLain Gill told AFP that while the Philippines is expected to stress maritime security, any pact China would agree to would likely lack teeth.

Diplomats and analysts say Manila will push to prevent further escalation and to promote cooperation with Beijing.

Areas of potential cooperation include ocean meteorology, which is crucial for maritime safety, as well as mechanisms to ensure access to fishing grounds.

As ASEAN chair, the Philippines will also shoulder the bloc's role in Myanmar, mired in civil war since a 2021 military coup.

"It is important for the Philippine government not to let the South China Sea issue eclipse the other priorities of ASEAN," said Mustafa Izzuddin, an international analyst at Solaris Strategies Singapore.

With Myanmar preparing for elections on December 28, diplomatic sources told AFP that ASEAN would not send observers -- a setback to the junta's push for international legitimacy -- although individual member states may do so.

Manila will face the task of forging a collective ASEAN stance, including on whether to invite junta leaders back to regional meetings which they have been barred from since the coup.

It will also oversee talks to appoint a permanent envoy for Myanmar.