Taiwan held a military exercise Thursday in waters near the northern Philippines in response to the killing of a Taiwanese fisherman, after rejecting repeated apologies from Manila.

President Ma Ying-jeou reiterated that the Philippines should take formal responsibility for the death of the 65-year-old, shot last week by Philippine coastguards who said his vessel intruded into Philippine waters.

Amid outrage in the island, Taipei has recalled its envoy and slapped sanctions on Manila, including a ban on the hiring of new Philippine workers, a travel alert urging Taiwanese not to visit the Philippines and the suspension of high-level exchanges.

Manila said it had "gone the extra mile" to appease Taipei and expressed concern that its special envoy sent to the island had been rebuffed.

On Thursday Taiwan sent a destroyer, one frigate and four coastguard ships to waters near the Philippines' Batan island to press its claims in the area, defence authorities said.

The ships went as close as 21 nautical miles west of Batan but stayed within Taiwan's exclusive economic zone, said Rear Admiral Lee Tung-pao.

"The move is aimed to highlight our determination to safeguard sovereignty. The coastguards have vowed to protect our fishermen wherever they are, and we'll support them," Lee said.

The fleet did not encounter any Philippine naval or coastguard vessels.

Two Taiwanese Mirage 2000-5 fighters flew over the fleet at low altitude as the warships tested their anti-aircraft capabilities.

In Manila, a military spokesman declined comment on the exercise and said it was not immediately clear whether the Taiwanese vessels were in international or Philippine waters.

The Philippines expressed indignation at Taiwan's treatment of its envoy Amadeo R. Perez, sent by President Aquino to apologise personally to the victim's family.

Perez left Taiwan earlier Thursday after Foreign Minister David Lin and the fisherman's family refused to meet him.

"I came to convey the president's and the Filipino people's deep regret and apology over the unfortunate and unintended loss of life," he told reporters at the airport before his departure.

Lacierda insisted the incident happened in Philippine waters and said the government should not have to "appease" Taiwan.

"We have gone the extra mile," Lacierda told reporters, referring to Aquino sending Perez to Taipei. "We have acted uprightly and decently as a respectable member of the international community."

Lacierda also cautioned that Taiwan's sanctions would hurt both sides. "It does not do anyone any good. Travel from their end will be affected as well. Their airlines will be affected," he said.

Perez heads the Manila Economic and Cultural Office which handles relations with Taiwan in the absence of diplomatic ties. The Philippines, like most countries, formally recognises China over Taiwan.

Taiwan has deemed it "unacceptable" that the Philippines described the fisherman's death as unintended.

"I do hope they will understand they have to be responsible in the international community. Shooting unarmed and innocent people in the open seas is not an act tolerated by civilised nations," President Ma said.

Amid widespread anger in Taiwan, a group of fisherman rallied at a port near the victim's home in southern Taiwan, holding placards reading "Protest" and "Seek justice" and burning a Philippine flag.

Taipei has pressed Manila to issue a formal apology by its government, to compensate the fisherman's family and to apprehend the killer.

Maritime tensions are already high over rival claims in the South China Sea, adjacent to where last Thursday's shooting took place.

China, the Philippines, Taiwan, Vietnam, Malaysia and Brunei all have competing claims to parts of the strategic and resource-rich maritime region.