Philippine President Benigno Aquino says his country will not back down in a territorial dispute with China.

Mr. Aquino made the statement Monday in his annual state of the union address, reacting to China's establishment on Sunday of Sansha city across several disputed islands of the South China Sea. China refers to the islands as Xisha, Zhongsha and Nansha, while the Philippines refers to the area it claims as Bajo de Masinloc, or Scarborough Shoal.

China's deployment of a military garrison to Sansha brought a swift response from President Aquino.

“If someone entered your yard and told you he owned it, would you agree? Would it be right to give away that which is rightfully ours?”

The territories under dispute are also claimed by Vietnam, Malaysia, Brunei and Taiwan.

China's most recent deployment to the islands was the latest move in an altercation that flared up in April between Chinese and Philippine ships near Scarborough Shoal.

President Aquino's remarks came in the middle of his state of the nation address announcing economic reforms achieved since former President Gloria Arroyo's corruption-laden administration, while highlighting the strengthening of the Philippine military.

In addition to the $30 million provided by Washington to help create a national coast watch center, President Aquino mentioned the anticipated arrival of more than 40 military aircraft to be delivered over the next two years to augment the country's strategic defense.