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Manila's military was one of the most poorly equipped in Asia when President Rodrigo Duterte's predecessor, Benigno Aquino, began a modest modernization program in 2012 - but it is still no match for its neighbor China.
Defense Secretary Delfin Lorenzana offered few details about the nearly $375 million ($505 million) contract awarded to BrahMos Aerospace to supply an onshore anti-ship missile system to the Philippine Navy.
BrahMos - a joint venture between India and Russia - has developed a cruise missile that the Indian defense ministry says is the fastest in the world.
The Philippines would be the first country to purchase it.
The deal involves three batteries, training for operators and maintainers as well as logistics support, Lorenzana said on Facebook where he posted a copy of the "Notice of Award".
Duterte has been seeking to acquire missile systems for the Philippine military under a modernization program called "Second Horizon".
"It's part of our territorial defense," said Colonel Ramon Zagala, spokesman for the Armed Forces of the Philippines.
The system would act as a deterrent to potential aggressors because "you can hit the target from far off", he told AFP.
Military analyst and historian Jose Antonio Custodio told AFP the system would likely be stationed on the western side of the main island of Luzon or on Palawan island, but he ruled out the Spratly islands due to the "lack of concealment".
Tensions over the South China Sea spiked last year, with Manila and Beijing accusing each other of territorial violations.
China claims almost all of the waterway, through which trillions of dollars in trade passes annually.
Beijing has ignored a 2016 ruling by The Hague-based Permanent Court of Arbitration that its historical claim is without basis.
Beijing has also hit back at a new United States report that says its maritime claims in the South China Sea are "unlawful", calling it misleading and a distortion of international law.
