Updated

Philippine President Benigno Aquino III vowed Wednesday his country will not back down from any challenge to its sovereignty and territory amid a sea dispute with China.

He said in a speech marking the 115th anniversary of the country's independence from Spain that the Philippines has not claimed territory that clearly belongs to another country but only asks that "our territory, rights and dignity be respected."

"Aggression does not run in our veins, but neither will we back down from any challenge," Aquino told government workers, diplomats and supporters at a public square named after revolutionary leader Andres Bonifacio, where he also led a flag-raising ceremony.

Aquino said in the next five years, 75 billion pesos ($1.74 billion) will be spent to modernize the armed forces.

He did not mention China by name, but the two countries have an ongoing territorial row in the disputed Spratly islands.

Last month, the Philippines protested the presence of a Chinese warship, two surveillance vessels and fishing boats off a shoal occupied by Filipino troops in the Spratlys in the latest territorial squabble between the two Asian countries.

Ayungin Shoal lies 196 kilometers (122 miles) from the southwestern Philippine province of Palawan. It is guarded by a Filipino marine unit based in a rusty warship that ran aground on a coral outcrop several years ago. The shoal is near Mischief Reef, which the Philippines had claimed but was occupied by China in 1995, sparking intense protests from Manila.

Brunei, Malaysia, Taiwan and Vietnam also claim parts of the Spratlys, a chain of islands, islets and reefs.