The Philippines pulled its biggest warship away from a standoff with Chinese vessels Thursday, but said the dispute was far from over with both nations deploying more non-military boats to the area.

Foreign Affairs Secretary Albert del Rosario said the Philippines decided to remove the navy's flagship from the tiny set of islands and reefs in the South China Sea while trying to negotiate an end to the five-day impasse.

"We are pursuing the diplomatic track in terms of coming to a resolution on the issue," del Rosario told reporters.

The dispute began on Sunday when Philippine authorities found eight Chinese fishing boats at Scarborough Shoal, 124 nautical miles west of the country's main island of Luzon.

The Philippines accused the fishermen of being there illegally, asserting the area was Philippine territory because it was within the country's 200-nautical-mile exclusive economic zone, as recognised by international law.

However China claims all of the South China Sea as its own, even waters up to the coasts of other countries, and Chinese authorities insisted the fishermen were allowed to be at the shoal.

The Philippine Navy deployed its biggest and newest warship to Scarborough Shoal on Sunday, immediately after the Chinese fishermen were discovered there.

The Philippines had planned to arrest the fishermen, but the two Chinese surveillance vessels appeared on the scene on Tuesday and blocked the warship from approaching the fishing boats.

The standoff escalated into a diplomatic brawl on Wednesday when both governments publicly protested each others' actions, and traded accusations as to whose presence in the area was illegal.

Del Rosario said the Philippines had been hopeful of resolving the issue by Thursday, but that appeared now unlikely.

"Yesterday, I was hopeful that we would arrive at a conclusion... I guess that didn't come about," he said.

"So I guess the next milestone is to try and get this done before the weekend."

Del Rosario, who has been leading the negotiations for the Philippines, heads overseas on the weekend.

The pullout of the warship left the Philippines with a 56-metre-long (184-foot) search and rescue coast guard vessel as its only presence at Scarborough Shoal.

However the region's military commander, Lieutenant General Anthony Alcantara, said the warship would still roam around the area and that a second coast guard vessel would also soon arrive.

Meanwhile, del Rosario said the Philippines had been taken by surprise when a third Chinese maritime vessel arrived at Scarborough Shoal on Thursday.

"There are three ships there now. Three white ships," he said.

Asked whether the Chinese side had informed Philippine negotiators about the deployment of the extra ship, del Rosario said: "No they did not."

Competing claims to the South China Sea have long been regarded as one of Asia's potential flashpoints for military conflict.

Aside from the Philippines and China, Taiwan, Vietnam, Malaysia and Brunei also claim all or parts of the waters as their own.

More than 70 Vietnamese sailors were killed in 1988 when China and Vietnam battled for control of the Spratlys, an archipelago south of Scarborough Shoal.

The sea holds huge economic and political significance as it is believed to sit atop vast oil and gas resources, is home to vast fishing grounds and hosts shipping lanes that carry a third of the globe's maritime trade.

The Philippines and Vietnam complained last year of increasingly aggressive acts by China in staking its claim to the South China Sea.

The Philippines accused Chinese vessels of firing warning shots at Filipino fishermen, as well as harassing an oil exploration vessel and placing markers on islets within Philippine territory.

However this week's standoff is the highest-profile in recent years.