The Jets' foray into the 2026/27 AFC Champions League Elite competition hasn't been kind.
Newcastle were thumped 7-1 by Kashima Antlers in their opener, before following it up with a 3-1 loss to Gamba Osaka and more recently a 5-2 defeat to a third Japanese club in Kyoto Sanga.
The Jets will receive yet another big challenge on Tuesday night when they host Chinese powerhouse Shanghai Port.
Muscat has led Shanghai to three titles as coach - the 2024 and 2025 Chinese Super League titles and the 2024 Chinese FA Cup.
Shanghai are currently fifth in the Chinese Super League ahead of the final round, while they have posted a win, draw and loss from their three AFC Champions League Elite matches.
There have been big questions about whether Newcastle have what it takes to compete with Asia's elite teams.
Milligan has no doubt the answer is yes, despite the massive difference in squad sizes and salaries.
"That doesn't mean that we shouldn't be able to compete," Milligan said on Monday.
"Slowly, slowly, you're seeing us get better and better at competing. And it's going to take time.
"We have to understand that, and that's when the mentality comes in - not to get frustrated, not to be drawn in just simply by scorelines.
"It's easy for myself as well to get frustrated. But when I look at the performance, there's no red flags there to say that we're not on the right path."
Milligan feels his squad is far more advanced compared to a year ago.
And despite the results not going their way, Milligan has one simple piece of knowledge he wants his players to keep reminding themselves of.
"It takes time. We have to continue to learn. We have to continue to grow. We have to continue to accept the lessons and the reasons why results are going the way they're going.
"But we have to be brave in what we do because I think definitely in patches we've shown that we're good enough to more than compete."
Muscat coached Milligan while at Melbourne Victory and isn't surprised to see the former Socceroos star coaching in his own right.
"He always showed leadership qualities out on the field," Muscat said.
"Did he have the attributes and leadership qualities that could follow him into management? Yeah for sure."
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