MANILA - The Philippines may invest in its first ever submarine fleet to help protect its territory in the disputed South China Sea, President Benigno Aquino said Wednesday.
The impoverished nation, which has never before operated submarines and until now relied on US surplus ships, has been ramping up its defence spending in response to China's military expansion in the region.
China claims almost all of the South China Sea -- home to some of the world's most important shipping routes -- despite conflicting claims from the Philippines, Vietnam, Malaysia, Taiwan and Brunei.
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 ($147 billion) is approximately 59 times that of its small neighbour, which stands at 115.8 billion pesos ($2.5 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.