China revealed plans a day earlier for a reserve to maintain "diversity, stability, and sustainability of the natural ecosystem of Huangyan Island", Beijing's name for the contested chain of reefs.

Chinese state media said the reserve would cover an area of 3,523.67 hectares (8,707 acres), with its "primary focus" being the coral reef ecosystem.

"The Philippines strongly protests the recent approval by the State Council of China of the establishment of the so-called 'Huangyan Island National Nature Reserve,'" the foreign affairs department said in a statement.

"The Philippines will be issuing a formal diplomatic protest against this illegitimate and unlawful action by China," it said, adding it held sovereignty over the area in question.

Philippine National Security Adviser Eduardo Ano said the mooted reserve was "less about protecting the environment and more about justifying (China's) control over... part of the territory of the Philippines".

"It is a clear pretext towards eventual occupation," he said in a separate statement.

Retired rear admiral Rommel Jude Ong, now a professor at Manila's Ateneo School of Government, said China reclaiming land and building permanent structures was "a possibility we cannot discount".

Sustained Philippine patrols in the area "might provide initial deterrence", he told AFP.

But China's foreign ministry pushed back Thursday, saying the area had never been part of Philippine territory and rejecting what it called "groundless accusations or so-called protests" from Manila.

"We urge the Philippines to immediately cease its infringements, provocations, and wanton hype, so as to avoid adding complicating factors to the maritime situation," spokesman Lin Jian said at a daily press briefing.

Scarborough Shoal lies 240 kilometres (150 miles) west of the Philippines' main island of Luzon and nearly 900 kilometres from Hainan, the nearest major Chinese land mass.

Last month, a Chinese navy vessel collided with one from its own coast guard while chasing a Philippine patrol boat near Scarborough, with Manila releasing dramatic video footage of the confrontation.

China claims almost the entirety of the South China Sea, through which more than 60 percent of global maritime trade passes, despite a 2016 court ruling that said its claims had no basis in international law.