The Philippines is exploring legal options against China accusing it of destruction of coral reefs within its exclusive economic zone (EEZ) in the South China Sea, an allegation rejected by Beijing as an attempt to "create political drama".

The Philippines foreign ministry late on Thursday said it was awaiting assessments from various agencies of the extent of environmental damage in Iroquois Reef in the Spratly islands and would be guided by Solicitor General Menardo Guevarra.

The Philippines is studying the possibility of filing a second legal case before the Permanent Court of Arbitration (PCA) in the Hague, Guevarra said on Friday. It won its first case, filed in 2013, contesting China's claims to the area.

The study "was prompted not only by the alleged destruction of reefs but also by other incidents and the overall situation in the West Philippine Sea," Guevarra told Reuters, adding that a report and recommendation would be sent to President Ferdinand Marcos Jr and the foreign ministry. Manila refers to the part of the South China Sea that it claims as the West Philippine Sea.

"The DFA stands ready to contribute to this effort," the Department of Foreign Affairs said in a statement.

"States entering the Philippines' EEZ and maritime zones therefore are likewise obliged to protect and preserve our marine environment," it said.

Any move to pursue arbitration would be highly controversial after the Philippines' landmark 2016 victory in a case against China that concluded Beijing's claim to sovereignty over most of the South China Sea had no basis under international law.

Iroquois Reef is close to the Reed Bank, where the Philippines hopes to one day access gas reserves, a plan complicated by China's claim to the area.

China, which has refused to recognise the 2016 ruling and has chafed at repeated mention of the case by Western powers, denied the latest claims of destruction of coral reefs.

"We urge the relevant party of the Philippines to stop creating a political drama from fiction," its embassy in Manila said late on Thursday, quoting Chinese foreign ministry spokesperson Mao Ning.

The Philippines' coast guard and armed forces earlier this week reported "severe damage inflicted upon the marine environment and coral" at the Iroquois Reef, where it said 33 Chinese vessels had been moored in August and September.

They described the vessels, which are typically fishing trawlers, as "maritime militia" and said they were harvesting the coral. Coral in the South China Sea has been used for limestone and construction materials, traditional medicines and even souvenirs and jewellery.

China has asserted its claims of sovereignty over the Spratly area with a series of manmade islands built upon submerged reefs, some equipped with runways, hangers, radar and missile systems. Vietnam, Malaysia and the Philippines also occupy islands in the archipelago, where several countries' EEZs overlap. (Reuters)