The Philippines military this week released images of Chinese ships it said were capable of dredging sand around the Scarborough Shoal -- a small but strategic reef and fertile fishing ground 130 miles (200 kilometers) west from the Philippine island of Luzon.
Beijing has denied it is reclaiming land, saying that while Chinese coast guard vessels patrol the waters around the shoal, which it calls Huangyandao, they were there for "law enforcement."
"The situation has not changed. There are no dredging or building activities there," said a statement from the Chinese Embassy in Manila.
Presidential spokesman Ernesto Abella said the Philippines was seeking clarification from Beijing about the ships.
It's one of a number of disputed islands and reefs in the South China Sea,
which is home to a messy territorial dispute.
Abella said Manila was communicating with Chinese officials on the presence of the ships, through diplomatic and "back door" channels -- primarily through the country's special envoy to China, former President Fidel Ramos.
The images were released shortly before leaders from the Association of Southeast Asian Nations (ASEAN) and Chinese leaders met in Laos for a regional summit.
In the chairman's statement on Wednesday, ASEAN said that land reclamation and "escalation of activities" in the waters had "eroded trust and confidence, increased tensions and may undermine peace, security and stability in the region."
It didn't mention China by name.
Tension first flared at the Scarborough Shoal in 2012 when China effectively evicted Filipino fishermen from the area
In July, a landmark international tribunal ruled
against China's claims in the South China Sea and said they had unlawfully restricted fishing access to the maritime feature.
On Thursday, US President Barack Obama, speaking at the ASEAN summit, said that the arbitration ruling
was legally binding and called for maritime disputes to be resolved peacefully.
According to the Financial Times
, Obama warned his Chinese counterpart in March that China would face serious consequences if it reclaimed land at the Scarborough Shoal.
Analysts say the Scarborough Shoal could be a strategic foothold for China.
Just 130 miles from the Philippines, it's within range of Subic Bay, a former American military base that US Marines, ships and planes have resumed using again under a new deal.
"The island has been blockaded since 2012 but hasn't been built up so this would be new," said Ashley Townshend, a research fellow at the United States Study Centre at the University of Sydney and a visiting fellow at the Center for Asia-Pacific Cooperation and Governance at Fudan University in Shanghai.
"Some think China will now spend the period after the G20 and before the US election building there, though that would be a huge provocation and unlikely in my view."
China claims almost all of the South China Sea, including islands more than 800 miles (1,200 kilometers) from the Chinese mainland, despite objections from neighbors including the Philippines, Malaysia, Brunei and Vietnam.
Tensions have ratcheted up in the past two years as China has reclaimed land in massive dredging operations in the Spratly Islands, turning sandbars into islands equipped with airfields, ports and lighthouses.
In recent months, Beijing has reacted angrily to US freedom of navigation operations in the region, scrambling fighter jets and boats and denouncing the nation's navies as "threatening Chinese sovereignty."
This weekend, China and Russia start military exercises in the South China Sea.