The Philippines and Vietnam are hoping to conclude a "strategic defence" agreement before year's end, possibly during the Apec summit in Manila in November, diplomats from both sides have announced.
"We're still completing the development of it, but we hope to have a signing sometime this year, before the year ends," the Philippines' Foreign Minister Albert del Rosario told reporters during Vietnam's National day reception on Wednesday.
Vietnam's Ambassador to the Philippines Truong Trieu Dong said negotiations were "over", and that both sides were "just finalising" the document.
"It will be more comprehensive, and there will be more fruitful cooperation between the two countries in almost every aspect of our relations," he said.
The Philippines and Vietnam agreed to forge a "roadmap" to a "strategic defence alliance" during the World Economic Forum in May last year (2014).
The two neighbours later formed a "joint commission" to thrash out this "alliance".
Their navies have already held "staff-to-staff" talks to discuss possible exchanges in intelligence and naval technology, it was reported.
A deeper alliance between Manila and Hanoi could involve more military staff exchanges, port visits, information sharing and naval drills.
It may also cover economic cooperation, trade, and tourism, said Mr Del Rosario.
The Philippines and Vietnam - formerly on opposite sides during the Cold War between the United States and the former Soviet Union - have been increasingly leaning on each other, as they confront a common adversary: China.
China claims nearly all of the 3.5 million sq km South China Sea, including territories held by the Philippines, Vietnam, Malaysia, Taiwan and Brunei.
The Philippines and Vietnam have been particularly riled by China's massive island-building programme in the Spratly islands in the southern half of the South China Sea.
Since it began dredging sand and coral reefs in December 2013, China has built artificial islands with a combined area of more than 1,170 hectares. At least two airfields are reportedly being built on these islands.
Vietnam is also confronting China in the Paracels.
Last year (2014), Vietnam and China were locked in a bitter, months-long standoff over a deepwater oil rig that Chinese state oil company CNOOC towed in waters in the Paracels that Vietnam insists are part of its territories.