The funds, part of a Japanese regional security assistance programme, will provide more rigid-hulled inflatable boats, coastal radar systems and automatic identification systems to the Philippine Navy, the two sides said.
The package will "contribute to maintaining and strengthening regional security" and "enhance the security of vital sea lanes," Japan's embassy said after a meeting between Ambassador Kazuya Endo and Philippine Foreign Minister Enrique Manalo.
The amount announced Thursday more than doubled the 600 million yen Manila received when the Official Security Assistance (OSA) programme launched in 2023.
The Philippines has been upgrading its maritime security assets and boosting ties with allies to counteract Beijing's aggressive assertion of its claims in the South China Sea, including areas disputed by the two neighbours.
On Thursday, the foreign ministry said the OSA deal would improve Manila's ability "to deter threats to peace, stability and security in the Indo-Pacific region".
China claims almost the entire South China Sea, brushing off rival claims from other countries and an international ruling that its assertion has no legal basis.
On Wednesday, Manila said the China Coast Guard fired water cannon and "sideswiped" a government vessel near the disputed Scarborough Shoal.
On the same day, another Chinese "intentionally rammed" a fisheries department vessel near Sabina Shoal in the Spratly Islands, the Philippines added.
Manalo said the Philippines would be submitting a diplomatic protest over the two incidents.
"It's very clear, I mean we were within our legal rights," Manalo told reporters after the signing of the security aid agreement with Japan.
"We don't understand why China again is repeating these actions which are clearly illegal."
On Wednesday, Japan expressed serious concern over the recent sea confrontations between the Philippines and China.
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