The Philippines and China have been engaged in months of confrontations over the South China Sea, which Beijing claims nearly in its entirety despite an international ruling that its assertion has no legal basis.

As many as 17,000 personnel are participating in the annual "Balikatan" exercises, which this year will simulate a "full-scale battle scenario" as the treaty allies seek to deter China's ambitions in the disputed waterway.

Chinese state broadcaster CCTV on Saturday reported that the country's coast guard had "implemented maritime control" over Tiexian Reef, also known as Sandy Cay, this month.

The tiny sandbank, part of the Spratly Islands, lies near Thitu Island, also called Pag-asa and site of a Philippine military facility.

The Philippine government has yet to formally respond to the claim.

In coastal Zambales province, hours north of the capital Manila, AFP journalists watched Sunday as the US Marine Corp's new MADIS short-range air defence system knocked a pair of drones from the sky.

The coastal defence exercise saw MADIS work in concert with the Philippines' SPYDER missile system, defending it from drone attack as it targeted simulated incoming cruise missiles.

"MADIS is short-range. SPYDER is more of a medium-range capability (and they) both engaged different threats," said Matthew Sladek, commander of the US 3rd Littoral Anti-Air Battalion.

"The more we work together, that only ... enhances our collective lethality."

- Blow to regional stability -

Chinese warships have been spotted in waters near the Philippines since the Balikatan exercises kicked off last week.

The aircraft carrier Shandong on April 22 "was detected underway 2.23 nautical miles (about four kilometres) southwest" of the Philippines' far northern Babuyan Island, the navy reported.

On Sunday, the Philippine Navy said three other vessels had been spotted a day before about 60 kilometres from Zambales.

US defence secretary Pete Hegseth last month told an audience in Manila that the United States was "doubling down" on its alliance with the country, noting the necessity of deterrence "considering the threats from the Communist Chinese".

Chinese foreign ministry spokesperson Guo Jiakun has since slammed the Balikatan exercises as a blow to regional stability.

On Monday, Balikatan will continue with troops simulating defending against an enemy landing force along a stretch of southern Palawan island.