Philippine military warns on Chinese investment in key islands

Presidential spokesman Salvador Panelo said Duterte was aware of proposals for Grande and Chiquita islands at the mouth of the former US naval base at Subic Bay as well as the isolated northern island of Fuga, but would not elaborate.

US forces vacated Subic and other Philippine bases in 1992 and it is now a home port for the Philippine Navy.

Military spokesman Brigadier-General Edgard Arevalo said Tuesday the government should study the security implications of handing over the islands to foreign entities.

"There's no doubt that these island features has or have strategic security impacts on us if these were to fall into the hands of other people. They have a strategic importance for our defence," Arevalo told reporters.

"While we approve of our economy getting a boost... we should also consider the security aspect that may be compromised if we fail to adequately study the implications of leasing these to foreigners," Arevalo added.

Duterte has overseen improved economic ties with China since being elected president in mid-2016, when he set aside a sovereignty dispute over islands and waters in the South China Sea that Beijing claims almost in its entirety.

This has led to a robust influx of Chinese investment in the Philippines, particularly in offshore gaming firms catering to China that have drawn several thousand Chinese workers to Manila.

Apart from the islands, Arevalo said the military was "definitely alarmed" at the rise in the number of Chinese workers in the country, including "reports that tourists are taking pictures of our naval installations".

"We need to determine what is the real purpose of their presence here," the military official added.

Panelo, the president's spokesman, stressed Tuesday the island investments were "mere plans" at this time, adding it was the job of the military and defence establishments "to see if there is any security concern on any issue".