Aquino said the Philippines could lose its entire west coast should China succeed in enforcing its claims.

“We’ve had to accelerate the modernisation of our armed forces for self-defence needs,” Aquino told reporters in Manila.

“We are a natural transit point into the Pacific and we are now studying whether or not we do need a submarine force,” he said.

Beijing has reclaimed more than 2,900 acres of land from the South China Sea in less than two years in an intensive island-building campaign, and has deployed surface-to-air missiles on a disputed island there, according to Taipei and Washington.

China’s military significantly dwarfs that of the Philippines, despite Aquino’s efforts to boost defence spending to record levels and the acquisition of new warships and fighter jets.

This year China’s proposed defence spending of 954 billion yuan (HK$1.14 trillion) is approximately 59 times that of its small neighbour, which stands at 115.8 billion pesos ($19.4 billion).

The Philippines has turned to its long-time ally the United States and former wartime foe Japan to boost its military hardware in order to counter China.

It has also asked a United Nations-backed arbitration body to declare China’s sea claims as illegal, with a ruling expected later this year.

China did not participate in the arbitration hearings at The Hague, citing its sovereignty over the area.

Aquino said the South China Sea dispute “concerns every country” since it could disrupt trade in the busy shipping lane, through which about a third of the world’s oil passes.

“The uncertainty breeds instability. Instability does not promote prosperity,” he said.

But while the Philippines is fortifying its defences, Aquino, who will step down in June when his single six-year term ends, said that as an impoverished nation the government would prioritise “butter rather than guns”.

“We have no illusions of ever trying to match, trying to engage anybody in an arms race, or in a military build-up,” he said.

Meanwhile, a senior official of the US Defence Department said on Tuesday that Japan is in talks with the Philippines about participating in joint drills with the United States on a regular basis.

Amy Searight, deputy assistant secretary of defence for South and Southeast Asia, was referring to the Balikatan joint exercises the US and Philippine militaries conduct near the South China Sea, where the latter is involved in territorial disputes with China.

“Japan is talking to the Philippines about a Status of Forces Agreement, so that Japan can regularly participate in those kinds of exercises,” Searight told a think tank event in Washington.

The envisioned agreement would govern the operations of the Japanese Self-Defence Forces in the Philippines.

“Japan is participating [in the Balikatan drill] as an observer. Japan very much wants to participate more,” she said.

Japan, under Prime Minister Shinzo Abe, has sought closer defence cooperation with the Philippines, Vietnam and other Southeast Asian countries in an apparent bid to increase pressure on China, which claims sovereignty over most of the South China Sea as well as the Japanese-administered Senkaku group of islets in the East China Sea.

In February, Japan signed a deal with the Philippines to transfer defence equipment and technology as part of efforts to build closer security ties, following similar accords with countries such as Australia, Britain and India.

Agence France-Presse and Kyodo