He said in a speech marking the 115th anniversary of the country's independence from Spain that the Philippines has not claimed territory that clearly belongs to another country but only asks that "our territory, rights and dignity be respected."
"Aggression does not run in our veins, but neither will we back down from any challenge," Aquino told government workers, diplomats and supporters at a public square named after revolutionary leader Andres Bonifacio.
Aquino said in the next five years, 75 billion pesos (USD 1.74 billion) will be spent to modernize the armed forces.
Last month, the Philippines protested the presence of a Chinese warship, two surveillance vessels and fishing boats off a shoal occupied by Filipino troops in the Spratlys in the latest territorial squabble between the two Asian countries.
Ayungin Shoal lies 196 kilometers from the southwestern Philippine province of Palawan. It is guarded by a Filipino marine unit based in a rusty warship that ran aground on a coral outcrop several years ago.
The shoal is near Mischief Reef, which the Philippines had claimed but was occupied by China in 1995, sparking intense protests from Manila.
The chain of reefs and rocks 230 kilometers west of the northwestern Philippine province of Zambales falls under its 200-nautical miles exclusive economic zone, Filipino officials say.
Brunei, Malaysia, Taiwan and Vietnam also claim parts of the Spratlys, a chain of islands, islets and reefs.
Yesterday, some 30 Filipino protesters wearing colorful fish masks gathered outside China's consular office in Manila to demand a stop to Chinese intrusions into Philippine claimed islands in the Spratlys.
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