Photo/IllutrationPhilippine Foreign Affairs Secretary Alan Peter Cayetano, left, shakes hands with Chinese Foreign Minster and State Counselor Wang Yi during a joint press conference on March 21 at the Diaoyutai State Guesthouse in Beijing. (Pool via AP).

BEIJING--Philippine Foreign Secretary Alan Peter Cayetano hailed a "golden period" in ties with China on Wednesday despite differences over the South China Sea as the countries discussed how they might conduct joint development projects in the disputed waters.

Cayetano made the remarks in Beijing after meeting with his counterpart Wang Yi, who said the two countries will advance discussions on "offshore oil and gas exploration."

"This way, the South China Sea disputes will no longer block the development of bilateral ties, but rather the South China Sea will be turned into a source of friendship and cooperation between our two countries," Wang said.

China and the Philippines have long tussled over islands and reefs in the South China Sea and since taking office in 2013, Xi has taken a hard line on issues of Chinese sovereignty.

Kicking off his second five-year term on Tuesday, Xi declared in a fervently nationalistic address to the ceremonial legislature that China would never cede "one inch" of its territory.

China rejected an international tribunal's 2016 ruling invalidating much of its claim to virtually the entire South China Sea in a case brought by the Philippines.

But Philippine President Rodrigo Duterte has pushed for closer relations with Beijing, downplaying the dispute over territory claimed by both sides and courting Chinese aid and investment. For its part, China has eased pressure on Philippine fishermen and is working with the 10 members of the Association of Southeast Asian Nations to reach a code of conduct to avoid frictions while operating in the area where an estimated $5 trillion in international trade passes annually.

Cayetano said Duterte will be attending the Boao regional economic forum on China's Hainan island next month, adding that the Philippines looks forward to welcoming Xi for a state visit.

"Our relationship is in a golden period, and with very positive momentum, we are now ready to face more challenges together," Cayetano said. He expressed confidence that China and the Philippines will find "a suitable legal framework" for their different viewpoints on the South China Sea.

Along with rich but diminishing fishing stocks, the South China Sea is believed to hold deposits of oil, gas and other resources.