DD1 had one right next to her anus...she had it from birth and she is now 18months and it is gone. it wasnt very big but she got nappy rash once so it would bleed when i wiped her bum...i was worried it would get infected being so close to poo but the doctor assured me it would be ok and it was.
I read stuff about it getting bigger but in dds case it never did...i dont know when it dissapeared i just remember thinking a couple of days ago hmmm something is missing
I could imagine having one on the lip to be more of a worry but fingers crossed your DS's goes away soon too