Philippine and Chinese officials held "candid" talks Friday in a bid to improve relations strained by a bitter territorial dispute in the South China Sea, official statements said.

A delegation led by Chinese Vice Foreign Minister Fu Ying met Philippine President Benigno Aquino and other senior officials for talks aimed at minimising tensions and bolstering trade and economic links.

"The two sides... had candid and in-depth discussions on the issues existing in their relations and agreed to... properly address differences so as to avoid negative impact," Fu said in a statement.

Tensions over competing claims to parts of the South China Sea escalated in April this year when ships from the two countries became locked in a standoff over a tiny group of islets called Scarborough Shoal.

China claims nearly all of the South China Sea, even waters close to the coasts of neighbouring countries. The Philippines says the Scarborough Shoal is well within its 200-nautical-mile exclusive economic zone.

Aquino told Fu that "the Philippines has been fostering a conducive atmosphere so that both sides can come to a mutually beneficial solution to issues of mutual concern", according to another joint statement.

"Vice Foreign Minister Fu also expressed the Chinese government's desire to move Philippines-China relations forward," the statement added, but did not specify if the maritime dispute was discussed.

Philippine Foreign Undersecretary Erlinda Basilio separately acknowledged that the issue was a topic of discussion, but refused to elaborate.

Earlier this week, Aquino said he hoped "ultra-nationalist" sentiment in China would ease after the leadership change there next month, leading to a resolution of the territorial dispute.

Philippine officials also presented Fu with a donation of $200,000 to help victims of the recent earthquakes that hit the Chinese provinces of Yunnan and Guizhou.

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