President Rodrigo Duterte has pursued warmer ties with China since taking office in 2016 in exchange for billions of dollars of pledged loans and investment.

The Department of Foreign Affairs protested against the vessels near the Philippines-occupied Thitu island, presidential spokesman Salvador Panelo told a regular news conference, without describing the boats. The Chinese ambassador said they were fishing boats.

"The mere fact that they are there and just staying there for a week, why, what are they doing there?" Panelo said. It was unclear when and where the Philippines filed the protest.

The Philippines monitored more than 200 Chinese boats near Thitu, locally called Pagasa, in January to March this year, military data showed.

The Philippines, China, Vietnam, Taiwan, Brunei and Malaysia have competing claims of sovereignty in the waterway, a conduit for in excess of $3.4 trillion of goods.

Lights from hundreds of buildings in China's sprawling artificial islands can be seen at night from Thitu.

Both Chinese and Filipino fishermen are present in the contested waters, Zhao Jianhua, China's ambassador to the Philippines, told reporters. He denied media reports that Chinese fishermen were carrying firearms.

Beijing and Manila were handling maritime issues through friendly and diplomatic channels, Zhao said.

"You don't have to worry about whether there would be any kind of outbreak of conflict or not," he said.

The announcement of the diplomatic protest came as the Philippines and United States, a treaty ally, kicked off an annual joint military exercise involving roughly 7,500 troops, including 50 from Australia.

They are aimed at enhancing response to natural disasters.

"It's not directed to any threat or existing security concern," military exercise director Lt. Gen. Gilbert Gapay told reporters.

Last month, U.S. Secretary of State Mike Pompeo assured the Philippines it would come to its defence if it came under attack in the South China Sea.

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