By Karen Lema and Neil Jerome Morales

MANILA (Reuters) – The Philippines has never promised China it would remove a grounded warship serving as a military outpost in the South China Sea, a senior security official said on Wednesday, deriding the claim by Beijing as a “figment of its imagination”.

The Philippines maintains a handful of troops aboard the World War Two-era Sierra Madre at the Second Thomas Shoal, known by Manila as Ayungin shoal, which is located inside its 200-mile exclusive economic zone (EEZ).

China on Monday accused the Philippines of reneging on a promise made “explicitly” to remove the ship, which Manila grounded in 1999 to bolster its territorial claims in one of the world’s most contested areas.

“The Philippine government will never enter into an agreement where we will abandon our sovereign rights and jurisdiction over the Ayungin shoal,” Jonathan Malaya, National Security Council assistant director general, told a press conference.

“For all intents and purposes, it is a figment of their imagination,” Malaya said, challenging China to produce evidence of the promise.

China’s embassy in Manila said it had no comment.

China and the Philippines have been embroiled for years in on-off confrontations at the shoal, the latest on Saturday. The Philippines accused China’s coast guard of using water cannon to impede a resupply mission to the Sierra Madre.

The Philippines was “committed to maintain” the rusty ship on the shoal, Malaya said, adding it was “our symbol of sovereignty in a shoal located in our EEZ”.

An EEZ gives a country sovereign rights to fisheries and natural resources within 200 miles of its coast, but it does not denote sovereignty over that area.

The Philippines won an international arbitration award against China in 2016, after a tribunal said Beijing’s sweeping claim to sovereignty over most of the South China Sea had no legal basis, including at the Second Thomas Shoal.

China has built militarised, manmade islands in the South China Sea and its claim of historic sovereignty overlaps with the EEZs of the Philippines, Vietnam, Malaysia, Brunei and Indonesia.

Jay Batongbacal, a maritime expert at the University of the Philippines, said control of the Second Thomas Shoal was not only strategic for China but it could be “another ideal place to build a military base.”

(Reporting by Neil Jerome Morales and Karen Lema; Editing by Martin Petty)