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U.S. Secretary of State John Kerry (L) and Philippine Foreign Affairs Secretary Perfecto Yasay shake hands after a news conference at the Department of Foreign Affairs in Pasay city Metro Manila, Philippines July 27, 2016. REUTERS/Erik De Castro

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By Lesley Wroughton and Martin Petty

MANILA (Reuters) - The Philippines "vigorously pushed" for the inclusion of comment on an arbitration ruling in a joint statement from Southeast Asian countries but its failure to secure that was no diplomatic win for China, Manila's foreign minister said on Wednesday.

The Philippines had not sought support from the Association of Southeast Asian Nations (ASEAN) or the international community in its arbitration case against Beijing over the South China Sea, and did not want to press the issue and risk dividing the group or provoking China, Perfecto Yasay said.

Yasay was speaking after returning from a meeting of foreign ministers in Laos, during which ASEAN dropped a U.S.-backed proposal to mention the landmark July 12 court ruling, which nullified Beijing's claims to most of the South China Sea.

"I am just saying this to dispel the reports that have been said that China came out victorious in the ASEAN meeting because we precisely agreed to not mentioning the arbitral award," Yasay told a news conference.

"But that (was) not the object of our meeting in ASEAN. The arbitral award is a matter between China and the Philippines."

Yasay said the arbitral tribunal was not an issue for ASEAN to deal with and it was strictly the business of China and the Philippines to handle.

Speaking later at a news conference with U.S. Secretary of State John Kerry, Yasay said there were no losers in Laos and the issuance of a joint communique was a triumph for the 10-member bloc.

"It makes ASEAN more credible to the international community and makes it more effective and relevant as a regional group," he said.

THORNY ISSUE

Kerry said he was "very satisfied" with the communique as it showed all members were fully supportive of the rule of law, even though the thorny issue of the arbitration case was left out.

"Sometimes, meeting like that and diplomacy, you don't always have to include every single word that may in fact sometimes make it harder to get to the dialogue that you want to get to," Kerry said.

The Philippines and Vietnam both wanted the ruling and a call to respect international maritime law to feature in the communique, but Cambodia - China's only real ally in ASEAN - rejected the wording on the ruling, diplomats said, backing instead China's call for bilateral discussions.

Manila backed down to prevent the disagreement leading to the group failing to issue a joint statement after a meeting for only the second time in its 49-year history.

China's official Xinhua news agency said Yasay's comments that the resolution of the dispute was for the Philippines and China only was "a welcoming change in Manila's policy".

"Now is the time for Manila to translate its words into action and start to fix its traumatised relations with China," it said in a commentary.

Kerry supported Yasay's call for China to take a position so bilateral dialogue could happen and said he was confident Manila would make the right judgements in how to move forward.

The failure by ASEAN to take a position or mention the arbitration had no impact on the validity of the court decision, Kerry added.

"It is impossible for it to be irrelevant, it is legally binding," he said.

Kerry met with Philippine's President Rodrigo Duterte for lunch on Wednesday and was due to discuss how to move ahead following the ruling, a U.S. official said.

Yasay earlier said the Philippines wanted to set a course for dialogue with Beijing, but would not say whether Manila would insist the arbitration issue be on the agenda as a prerequisite for talks.

(Additional reporting by Karen Lema in Manila and Ben Blanchard in Beijing; Editing by Lincoln Feast)

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