The Philippines can only afford a "frugal" military upgrade, defence officials said Monday, even though maritime tensions with China are growing.

Despite a proposed 25 percent rise in next year's defence budget, the government must still divide resources between external defence and internal threats like insurgencies and natural disasters, Defence Secretary Voltaire Gazmin and other security officials added.

Since President Benigno Aquino took office in mid-2010, the Philippines has acquired two former US coast guard cutters, three landing craft from Australia and South Korea and seven surplus UH-1H helicopters.

"The goal of updating and modernising our armed forces is a long and painstaking process," Gazmin told a ceremony for the commissioning of 10 more newly-acquired air force helicopters.

"That means we have to be frugal and acquire reliable platforms at very reasonable costs... as allowed by our meagre financial resources."

The modest upgrade has been prompted partly by China's moves to stake its claim to most of the South China Sea.

These include building new islands in the Spratly archipelago and taking effective control of Scarborough Shoal after a standoff with the Philippine Navy.

Philippine Air Force chief Lieutenant-General Jeffrey Delgado said the 10 new helicopters will be used to address internal security problems.

The military expects more aircraft deliveries this year including possibly the first two of 12 FA-50 fighter jets earlier ordered from a South Korean supplier, Delgado told reporters.

Delgado said the FA-50S were mere "transition aircraft" toward more advanced more advanced fighters jets which the Philippines cannot now afford.

Defence department spokesman Peter Paul Galvez said communist and Muslim insurgencies remained a priority despite the new watchfulness on Philippine borders.

"We are first focusing on internal security and in the succeeding horizons, we will go towards external defence," he said, criticising China's reclamation work.

"They should stop their island-building. That steps up the pace of militarisation," Galvez said.

The Philippines has been among the most vocal in challenging China's sea claims, which also overlap those of Brunei, Malaysia, Taiwan and Vietnam.

US ambassador Philip Goldberg said the United States, the Philippines' closest defence ally, was ready to provide surplus military equipment and budgeted $50 million in foreign military aid to the Philippines last year.