China agrees on no new expansion: Philippines

China has assured the Philippines it will not occupy new features or territory in the South China Sea, under a new "status quo" brokered by Manila as both sides try to strengthen their relations, the Philippine defence minister said.

Philippine Foreign Secretary Alan Peter Cayetano also said the Philippines was working on a "commercial deal" with China to explore and exploit oil and gas resources in disputed areas of the South China Sea with an aim to begin drilling within a year.

The defence minister, Delfin Lorenzana, told a congressional hearing the Philippines and China had reached a "modus vivendi", or a way to get along, in the South China Sea that prohibits new occupation of islands.

"The Chinese will not occupy new features in the South China Sea nor they are going to build structures in Scarborough Shoal," Lorenzana told lawmakers late on Monday, referring to a prime fishing ground close to the Philippines that China blockaded from 2012 to 2016.

China claims almost the entire South China Sea, a waterway through which about $3 trillion worth of sea-borne trade passes every year. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have conflicting claims in the area.

Asked about the Philippine comments, Chinese Foreign Ministry spokeswoman Hua Chunying said China had sovereignty over the Spratly Islands and their nearby waters, and China would continue to dedicate itself to peacefully resolving the dispute through talks with the parties directly involved.

China has built seven islands upon reefs in disputed areas, three of which, experts say, are capable of accommodating fighter jets. They have runways, radars and surface-to-air missiles which China says are for defence.

The Permanent Court of Arbitration in The Hague invalidated China's claim over most of the South China Sea in July last year. China has refused to recognise the ruling, which clarified Philippine sovereign rights to energy reserves within its 200-mile Exclusive Economic Zone (EEZ).

The Philippine energy department last month said it may resume drilling for oil and gas on the Reed Bank, which is within the Philippine EEZ, before the end of the year, offering new blocks to investors in a bidding in December.

The Philippines suspended exploration in the Reed Bank in late 2014 as it pursued the international arbitration.