A stable independent Philippine state failed to realize, and Palau was sold by Spain to the German Empire along with the Caroline Islands.

[3] The formalization of ties were done in Manila and was oversaw by Philippine Foreign Secretary Domingo Siazon and Palau Minister of State Andres Uherbelau.

The closure of the Philippine embassy in Melekeok was expected to affect Filipinos in neighboring countries such as Micronesia and the Marshall Islands.

[8] 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.

[12] In September 2021, Philippine Foreign Secretary Teodoro Locsin Jr. met with Palau President Surangel Whipps Jr. with the former pledging to resolve the maritime dispute between two countries.

[15][16] 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.