A new dispute is building between China and the Philippines over oil exploration in the South China Sea, with neither side showing any sign of backing down.

The dispute began earlier this week, when Philippines Energy Minister Jose Almendras announced that foreign investors will be invited to explore for oil and gas on two undersea tracts northwest of Palawan Island, in what Manila has begun calling the West Philippine Sea.

China's foreign ministry spokesman Hong Lei denounced the plan at a briefing in Beijing Tuesday, saying the tracts actually belong to China.

“Any country's government or company engaging in the extraction and exploration of oil or gas in China's sea territories, without permission from the Chinese government, is illegal.”

Hong said any such exploration without Chinese permission is illegal.

Manila, however, appears determined to go ahead. The Associated Press quotes Philippines Foreign Secretary Albert del Rosario on Wednesday reiterating his country's decision to approve the exploration. The minister maintained that the areas in question are “well within (the Philippines') territory” based on the United Nations Convention on the Law of the Sea.

The two countries have exchanged repeated diplomatic protests over the past year concerning exploration rights in the waters, which are believed to be rich in oil and gas.

The Philippines has accused Chinese naval ships of repeatedly interfering with vessels seeking to explore in waters within Manila's exclusive economic zone, which extends for 370 kilometers from its shores. Vietnam has made similar complaints of Chinese interference.

Both the Philippines and Vietnam base their claims of a right to explore in the waters on the U.N. law of the sea convention. China claims it owns virtually all of the South China Sea based on old maps and historic claims.