MANILA- The Philippines may cancel the planned development of 3 islands backed by China if found to be a threat to national security, Malacañang said Thursday.

This, after the Philippine Navy raised concerns over a reported plan to develop 3 "strategic" islands— Fuga Island, Chiquita Island, and Grande Island- with the help of Chinese financiers.

“Hindi tayo papayag kung security threat (We will not allow it if it’s a security threat),” Presidential Spokesperson Salvador Panelo said Thursday.

The government, however, is still studying the deal after Defense Secretary Delfin Lorenzana said these “may raise security concern,” Panelo said.

• Navy raises alarm over alleged China-backed development of 3 islands

Waters surrounding Fuga Island, located in the Babuyan archipelago, is home to telecommunications cables. It also served as a jump-off point for troops during World War II, according to the Navy. Grande and Chiquita are located at the mouth of Subic Bay, home to a freeport zone and a former US Navy base.

Opposition Sen. Risa Hontiveros has sought an investigation into the reported development plan.

• Hontiveros calls for probe into Chinese investment in PH isles

The Philippines and China have unresolved disputes over the West Philippine Sea, the country's exclusive economic zone in the South China, which Beijing claims in near entirety.

China has stepped up militarization and island-building activities in the waters, shunning a July 2016 arbitration ruling invaliding its expansive 9-dash line claim to the resource-rich waters.

President Rodrigo Duterte said recently he would invoke the ruling in tackling the sea dispute with Chinese President Xi Jinping when he visits China later this month.

• 'The time has come': Duterte to invoke PH arbitral win in fifth China visit