Indonesian lawmakers on Tuesday approved higher defense spending this year to fund, among other things, major upgrades to military facilities in the Natuna Islands, whose nearby waters Beijing says are subject to "over-lapping claims".
Parliament's approval came just days after President Joko Widodo visited the remote island chain to assert sovereignty over the area, in what Indonesian officials described as the strongest message that has been given to China.
China's increasingly assertive actions in the South China Sea, which are worrying Southeast Asian countries, are fuelling an increase in security spending in the region.
"(Natuna) needs to be guarded and to do that the military needs to have proper facilities, they need additional funds," said Johnny Plate, a member of parliament's budget committee.
Parliament approved an increase to the defense ministry's budget this year to 108.7 trillion rupiah ($8.25 billion), up nearly 10 percent from the initial 2016 budget.
Some of the new funds will be used to upgrade the airbase and build a new port in the Natuna Islands to allow for more warships and fighter jets to be based there, Defence Minister Ryamizard Ryacudu told reporters.
Indonesia's navy has stepped up patrols around the islands after a series of face-offs between Indonesian naval vessels and Chinese fishing boats in the area.
Jakarta objects to Beijing's inclusion of waters around the Natuna Islands within China's "nine-dash line", a demarcation line used by Beijing to show its claims.
Beijing last week said that those waters were subject to overlapping claims on "maritime rights and interests" between China and Indonesia. Jakarta has rejected China's stance, saying the waters are in Indonesia's territory.
Despite the objections, Indonesia is not part of a broader regional dispute over China's reclamation activities in the South China Sea.
China claims almost the entire waters, where about $5 trillion worth of trade passes every year. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims.