The Philippines will "exercise territorial sovereignty" and build a pier in the disputed Spratly islands in the South China Sea, officials said Friday.

The department of foreign affairs said it would build the pier on the largest of the five Philippine-occupied islands, known as Thitu, but which it calls Pag-asa.

The Philippines, China, Taiwan, Vietnam, Malaysia and Brunei have competing claims over large parts of the South China Sea including the Spratly islands.

The territorial dispute over the waters, which are believed to sit atop vast deposits of gas and oil, has for decades been regarded as one of Asia's potential military flashpoints.

"What is ours is ours. Pag-asa Island is ours... The Philippines exercises territorial sovereignty over the West Philippine Sea (Philippine-claimed areas of the South China Sea)," the department said in a statement.

"The construction of a pier on Pag-asa Island is a clear exercise of Philippine sovereignty."

Filipino troops occupy five Spratly islands including Thitu, grouping them as a town called "Kalayaan" or Freedom.

Tensions over the reputedly oil- and gas-rich territory have risen in recent months with the Philippines accusing China of aggressive actions.

This has included an incident where Chinese vessels fired on Filipino fishermen and harassed an oil exploration vessel in its waters.

The Filipino mayor of the Kalayaan group, Eugene Bito-onon, told AFP several government agencies had agreed to develop the pier on 37-hectare (91-acre) Thitu, which hosts about 60 Filipino civilians as well as troops.

Most of the residents' food and other needs have to be shipped or flown in.

The cost and timetable for the project have not been finalised but Bito-onon said construction of a harbour will allow equipment and materials to be rolled off ships.

"Once we have the pier, we can unload equipment for the improvement of the airstrip and the construction of other facilities and even tourists," he said.

Thitu lies about 450 kilometres (280 miles) northwest of Palawan island, the nearest major Philippine landmass. China's closest big landmass is Hainan island, more than 900 kilometres away.