The Philippine Coast Guard ship BRP Teresa Magbanua had been anchored inside Sabina Shoal since April to assert Manila's claims to the area and prevent China from seizing it.
Beijing has continued to press its claims to almost the entire South China Sea despite an international tribunal ruling that its assertion has no legal basis.
Philippine and Chinese vessels have collided at least three times recently near Sabina Shoal, located 140 kilometres (86 miles) from the Philippines' western island of Palawan and 1,200 kilometres from China's nearest major landmass, Hainan island.
The Teresa Magbanua's bridge wing and freeboard were damaged in one of the collisions.
"During her deployment... she challenged an encirclement by a larger flotilla of intruders, battled inclement weather, with her crew surviving on diminished daily provisions," National Maritime Council Chairperson Executive Secretary Lucas Bersamin said in a statement Sunday.
The Teresa Magbanua "carried out her sentinel duties against overwhelming odds", he added.
Last month Chinese vessels blocked a resupply mission to the Filipino sailors on board the ship, leaving them running critically low of food and other provisions.
Earlier this week officials from the Philippines and China held high-level talks on their maritime issues where Beijing reiterated its demand for the withdrawal of the Philippine vessel.
The latest situation has echoes of 2012, when Beijing took control of Scarborough Shoal -- another strategic feature about 240 kilometres west of the Philippines' main island of Luzon.
Then, Manila pulled its ships back after a tense two-month maritime standoff.
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