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The military’s top priority is to build a naval base on Palawan’s western coastline, opposite the disputed Spratly Islands, although the plans have been delayed by funding bottlenecks, Armed Forces of the Philippine chief of staff General Gregorio Pio Catapang Jr. told Reuters.

Catapang said US, Japanese and Vietnamese naval vessels would be allowed to make port calls once the facility at Oyster Bay was finished.

Developing the island paradise into a military facility could exacerbate tensions with China, which claims sovereignty over almost the entire South China Sea, including the Spratlys. The Philippines, Vietnam, Malaysia, Brunei and Taiwan also claim parts of the vital waterway.

Palawan is about 160 kilometers from the Spratlys, where China’s rapid land reclamation around seven reefs is causing alarm among some Asian countries and drawing increasing criticism from Washington.

“We feel this is the number one priority because of the emerging security situation,” Catapang said in an interview late on Monday at a military base in Puerto Princesa City after taking reporters to Pagasa Island in the Spratlys.

“As soon as we have the money, we will pour resources there,” he said.

China last month offered a detailed defense of its reclamation in the Spratlys, saying the new islands would provide civilian services such as weather forecasting and search and rescue facilities that would benefit other countries.

Catapang said P800 million was needed for the initial development of the naval facility and then P5 billion to turn it into a major operating base.

While plans had been drawn up, they were stalled by a lack of funds, he said.

“There is nothing there yet, we are still constructing an access road and upgrading the water and oil depots that would service ships. There’s still much work to do,” he said.

Japan, which is helping Manila boost its maritime capabilities, might fund infrastructure around the base but not the facility itself, a Japanese source with knowledge of the plan said earlier this year.

Washington has asked for access to Philippine military bases in eight locations to rotate troops, aircraft and ships for training as Washington shifts more of its forces to Asia, Catapang said last month.

Security ties between the Philippines and Vietnam are also growing in light of China’s assertiveness.

The Philippine navy has said it planned to base two former US Coast Guard cutters at Oyster Bay, a sheltered cove within the much larger Ulugan Bay, once the facility was finished.

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