President Rodrigo Duterte said he has told his country's military to assert Philippine ownership of a large ocean region off the country's northeastern coast where Chinese survey ships were spotted last year.
"You go there and tell them straight that this is ours, but I say it in friendship," he told a news conference, when asked about the issue in the waters facing the Pacific Ocean.
His country has no option but to be diplomatic about ownership of Benham Rise, because "I cannot match the might of China," he said.
Beijing and Manila have a separate long-running territorial feud in the South China Sea west of the Philippines, but tensions have eased considerably since Mr Duterte took office last June and began reaching out to China.
He has placed the dispute on the backburner while seeking Chinese trade and economic aid.
The Philippine military spotted the Chinese survey ships crisscrossing the Benham Rise waters suspiciously from July to December last year, Defence Secretary Delfin Lorenzana said last week.
He said the government is considering an increase in patrols and the building of territorial markers in the offshore region.
The Chinese ships' presence in the area was to be discussed at a meeting of National Security Council executive members and Mr Duterte.
The Department of Foreign Affairs said it asked China through its embassy to clarify what the survey ships were doing in Benham Rise last week.
In 2012, the United Nations Commission on the Limits of the Continental Shelf declared Benham Rise to be part of the Philippine continental shelf, where the country has exclusive rights to fish and exploit resources, including undersea deposits of oil and gas, Philippine officials said.
The Chinese foreign ministry has said its ships have a right to pass through the area under international law.
In the South China Sea, Mr Duterte has scuttled plans made under his predecessor for joint Philippine patrols with the US Navy in disputed waters to avoid offending China. A US Navy aircraft carrier, the USS Carl Vinson, has been sailing on a mission to ensure freedom of navigation in the sea, claimed virtually in its entirety by China.
"America wants to pick a fight there," said Mr Duterte, who has openly criticised US security policies. "Why would I get into a trouble in that area?