The Philippines is determined to spend $1.8 billion on military upgrades -- mostly naval -- to protect the country against "bullies" in its territorial waters.

Philippines President Benigno Aquino made the pledge during a speech to mark the navy's 115th anniversary at Fort San Felipe in Cavite, reported The Tribune newspaper.

"We have a clear message to the world," he said. "The Philippines is for Filipinos and we have the capability to resist bullies entering our backyard."

Aquino said the Philippines will buy by 2017 two frigates, two anti-submarine helicopters, three fast vessels for coastal patrol and eight amphibious assault craft.

"We also will improve our communications, intelligence and surveillance systems," he said.

Aquino said the government already had spent nearly $680 million on military modernization over the past three years, including the purchase of two refurbished Hamilton class cutters acquired from the U.S. Coast Guard.

The decommissioned cutters -- formerly the USCGC Hamilton and the USCGC Dallas -- were sold as excess defense articles through the U.S. Foreign Assistance Act 1961.

Chinese claims on the South China Sea -- or the West Philippine Sea as it is referred to in Manila -- were a major driver for the purchase.

During the ceremony at Cavite, Defense Secretary Voltaire Gazmin confirmed that Chinese fishing vessels escorted by a Chinese naval ship recently were seen in Philippine waters, a report by the Manila Bulletin newspaper said.

Gazmin said the Chinese vessels were fishing off the Philippine Ayungin Shoal in the West Philippine Sea.

He also said a diplomatic protest would be sent to China through the Philippines Department of Foreign Affairs.

A report by The Philippine Star newspaper said Aquino expected the navy to act also against domestic enemies.

"We want the Filipino to feel secure and safe, wherever he may be in any part of the world," he said at the ceremony. "That is why we expect security forces to curb illegal smuggling transactions, illegal drugs and trafficking of persons."

Aquino said the signing of the Revised Armed Forces of the Philippines Modernization Act in December, which extends a major military modernization program for another 15 years, is a move in the right direction for the army, air force and navy.

The act ensures the $1.82 billion for upgrades will be spent within five years to boost the military's capability, said a report on the signing by Tempo newspaper in December.