Aaron Favila, Associated Press
Filipino Navy and guests wait as the BRP Gregorio Del Pilar (PF 15) prepares to dock during ceremonies at Manila's pier, Philippines Tuesday Aug. 23, 2011. The arrival of the decommissioned U.S. Coast Guard cutter is part of a drive by the Philippines to modernize its navy amid tensions with China over the disputed Spratly Islands in the South China Sea.

MANILA, Philippines — The Philippines and Vietnam each received warships Tuesday to beef up their navies as they face tensions with China over disputed islands, raising the prospect of a deepening arms race in the South China Sea.

The two Southeast Asian nations also are shopping for additional military assets, including submarines for Vietnam and air defense radars for the Philippines, as the impoverished nations try to gain leverage with their huge northern neighbor while staying within their budgets.

The Philippines has turned to second-hand U.S. hardware: A decommissioned U.S. Coast Guard cutter was formally unveiled Tuesday in Manila port as the most modern vessel in the dilapitated Philippine fleet. Vietnam, meanwhile, received its second, brand new Russian-made guided missile cruiser in the Cam Ranh naval port on Monday, state media reported.

The two countries are at loggerheads with China over disputed Spratly and Paracel Islands in the South China Sea, which Beijing claims in its entirety on historical grounds.

Authorities in Manila and Hanoi have repeatedly accused Chinese vessels this year of interfering with their oil and gas explorations and harassing fishermen within their 200 nautical mile (370 kilometer) exclusive economic zones.

Beijing has named the South China Sea one of its "core interests," meaning it could potentially go to war to protect it. Last week, it launched its sea tests of its first aircraft carrier, a refurbished former Soviet vessel.

Along with aircraft carriers, China's navy is adding advanced submarines, including those equipped with nuclear weapons, along with new destroyers and amphibious assault ships. China's fisheries surveillance and coast guard are benefiting too from new vessels and greater funding, making them increasingly important players in regional disputes.

Despite such moves, Beijing has rejected the notion of maintaining overseas bases and insists that its military expansion is purely defensive in character.

In a recent interview with Germany's Spiegel Online, Vice Foreign Minister Fu Ying said concerns about China's naval expansion were based on political ideology and "Cold War thinking."

"You feel comfortable with aircraft carrier ownership by your allies, like the United States and France, but you are more concerned if China also has one," Fu was quoted as saying.

In July, China and the 10-member Association of Southeast Asian Nations, which includes the Philippines and Vietnam, agreed to work toward a formal code of behavior in waters straddling about 100 Spratly islets, reefs and atolls and one of the world's busiest ship lanes.

China previously has rejected such a formal mechanism, preferring to deal with individual countries where its sheer size, economic clout and growing military strength give it an advantage.

China's defense budget has steadily increased to become the world's second highest after the U.S., spending $91.5 billion last year and fielding a military vastly superior to those of any of its Southeast Asian neighbors.

"Even if we are three times more prepared than we are now, we (would be) defeated because China ... can blow us out of the water easily," said security analyst Rex Robles, a retired Philippine navy commodore.

He said an arms race in the regions is counterproductive because if hostilities erupted, every side stands to lose, especially economically.

"If war breaks out there, China's development will also be stunted," he told The Associated Press. "China's resources are quite huge, but maybe not enough to sustain a war there."

The Philippines, a U.S. defense treaty partner, is relying on Washington to help modernize its aging fleet, which includes many World War II vessels, one of which is among the oldest active warships in the world.

Philippine President Benigno Aquino III saidTuesday that the U.S.-supplied 3,390-ton Hamilton-class cutter, equipped with the helicopter hangar and flight deck, will advance the Philippines' capability to patrol its exclusive economic zone and energy exploration areas.

"This modern ship is a symbol of our readiness to take care, guard and if needed, defend the interest and welfare of our nation," Aquino said at a ceremony accompanied by the U.S. ambassador.

The government also is looking at buying more ships, helicopters, jet trainers and air defense radars, he said.

Vietnam said the arrival of the Gepard-class frigate, its most modern warship, marked a "new development" in improving "the combative strength as well as the capability of managing and defending the country's sea sovereignty," the Thanh Nien newspaper quoted navy commander Nguyen Van Hien as saying.

Vietnam took the delivery of the first warship of this kind in March.

It has also placed an order for six diesel-electric "Project 636" Varshavyanka submarines for a total of $2 billion. The submarines are also known by their NATO nickname "Kilos." The delivery of the first submarine is expected in three years.

Associated Press writers Oliver Teves in Manila, Chris Bodeen in Beijing and Margie Mason in Hanoi contributed to this report.