In the recent era, formal diplomatic relations between Palau and the Philippines were established on July 15, 1997. The formalization of ties were done in Manila and was oversaw by Philippine Foreign SecretaryDomingo Siazon and Palau Minister of State Andres Uherbelau.
Diplomatic missions
Palau currently has an embassy in Manila as of 2012 while the Philippines previously had an embassy in Koror which opened in 1998. The closure of the embassy in Palau along with 9 other diplomatic missions of the Philippines by the end of July 2012 was announced on January 25, 2012. Budgetary constraints was the cited reason. Palau President Johnson Toribiong requested PresidentBenigno Aquino III to reconsider the government's plan to close the embassy in Palau. According to Toribiong the embassy is essential in the delimitation talks on the two countries' maritime border and that the embassy serves about 5,000 Filipino workers, which compose of 60 percent of Palau's foreign work force and 20 percent of the country's total population. The closure of the Philippine embassy in Melekeok was expected to affect Filipinos in neighboring countries such as Micronesia and the Marshall Islands. The Philippine embassy in Koror closed on July 31, 2012. Since then it has maintained relations with Palau along with Micronesia and the Marshall Islands through the DFA's Office of Asian and Pacific Affairs. Consular affairs fall under the auspices of the Philippine Consulate General in Hagåtña, Guam, and an honorary consulate in Koror.
Cultural relations
There are 5,000 Filipino workers in Palau. 60 percent of all foreign workers from Palau came from the Philippines and they compose of 20 percent of Palau's total population. Palau's Medical Referral Program which was in force for almost 20 years, sends 100–150 patients annually to the Philippines for medical treatment. Many of Palau citizens goes to the Philippines to study in colleges and universities for higher education. A pygmy population was reported in Palau but disappeared in about 1100 A.D.
Disputes
Maritime borders
The exact boundaries of Palau and the Philippines is remained to be defined by delimitation talks. A final agreement has not been made regarding the issue. The two countries share a maritime border with Palau situated southeast of the Philippines.
Filipinos fishing in Palau's EEZ
Filipinos fishing within Palau's Exclusive Economic Zone remains an irritant to Palauan Sovereignty. Palau's waters, especially near its southern reefs is currently threatened by over-fishing from boats from China, Indonesia, the Philippines and other countries. Diplomatic relations between Palau and the Philippines reached its lowest point when Palau President Kuniwo Nakamura threatened to sever ties with the Philippines due to repeated violations of Palau's EEZ by Filipino fishing vessels in January 1999. However, in the recent years, Palau prefers to work on a fishing agreement with the Philippines rather than to file diplomatic protest against its neighbor. No fishing agreements have been established until now
