Beijing is expanding its large-scale land reclamation in the disputed South China Sea, Philippine president Rodrigo Duterte said Friday, despite an international court ruling rejecting most of China's claims in the resource-rich area.
A UN-backed tribunal ruled in July that China's claims to almost all of the strategic sea had no legal basis and its construction of artificial islands in disputed waters was illegal.
But Duterte said he received an "unsettling" intelligence report showing China had sent barges to the contested Scarborough Shoal and had appeared to begin construction in the area for the first time.
China previously constructed artificial islands in the Spratly chain in the South China Sea. The United States warned in June of "actions" if Beijing extended its military expansion to the Scarborough Shoal.
"I think they are starting in (Bajo de) Masinloc and this will be another ruckus there," Duterte said, referring to the shoal by its local name.
He said the Philippine Coast Guard found "a lot of barges" near the area.
"There seem to be new barges coming in and they suspect that's going to be another construction."
China has sought to assert its claims in the South China Sea by building a network of artificial islands capable of supporting military operations.
Its massive land reclamation has prompted criticism from the US and claimant countries, with Washington warning it endangers freedom of navigation in international waters.
Vietnam, Malaysia, Brunei and Taiwan also have claims to the sea, through which over $5 trillion in annual trade passes.
The Scarborough Shoal, a rich fishing ground within the Philippines' exclusive economic zone and far away from the nearest major Chinese landmass, is a particular flashpoint. China took control of Scarborough Shoal in 2012 after a stand-off with the country's navy.
Duterte's comments come a week before a regional summit in Laos where the South China Sea dispute will be on the agenda.
He said he would consider bringing up the construction work during bilateral talks with Beijing, adding it would affect global commerce.
"If (China) continues building military installations there ... insurance would go up for the ships and the goods they transport. Because then it would be a source of conflict and thereby the threat is always there."
Duterte, who took office two months ago, has vowed to mend ties with China after his predecessor Benigno Aquino angered Beijing by filing the arbitration case in 2013.
He has said he would not raise the matter of the ruling in Laos to avoid escalating tensions. But on Friday, Duterte he said he would insist on China's compliance with the verdict during direct talks with Beijing.
He criticised the Asian giant's statements saying it would ignore the ruling.
"We can only take so much but you cannot be slapped every day with (those) kinds of words."