Once opposed to the prospect of a major naval base inside this picturesque Philippine cove, fearing it would mean bars and brothels for visiting sailors, local residents now look forward to the arrival of American and other foreign warships.
The reason is China, whose rapid creation of artificial islands in the disputed Spratly chain of the South China Sea is setting off alarm bells across the Philippines, a country with one of the weakest navies in the region.
Nowhere is that concern more palpable than around Ulugan Bay, a large sheltered expanse of pristine blue water along the western Philippine coastline that lies 160 km (100 miles) from the Spratlys.
"Before we were not so concerned about the South China Sea but now we feel the tension," said Jane Villarin, head of the village of Macarascas, one of several small townships dotted around the bay. "We are afraid China will one day come to our community because of this dispute."
Developing the naval base is the Philippine military's top priority although funding bottlenecks have caused delays, armed forces chief General Gregorio Catapang told Reuters on Monday after taking reporters to a Philippine-held island in the Spratlys, a trip that drew a sharp rebuke from China.
The plan calls for transforming a small existing naval facility at Oyster Bay, a cove within Ulugan Bay on Palawan island, into a fully-fledged operating base within five years for Philippine naval frigates to berth.
Catapang also said this week that warships from the United States, Japan, Australia and Vietnam would be welcome to make port calls.
The U.S. Navy could refuel and resupply at the base, he added, although the Philippine navy has said it would be hard to accommodate destroyers and aircraft carriers because of the bay's relatively shallow water.
Washington has already asked for access to Philippine military bases in eight locations to rotate troops, aircraft and ships for training as the United States shifts more of its forces to Asia, Catapang said last month.
New road
Developing the mangrove-fringed bay into a major naval base could exacerbate tensions with China, which claims sovereignty over almost the entire South China Sea, including the Spratlys. The Philippines, Vietnam, Malaysia, Brunei and Taiwan also claim parts of the vital waterway.
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When Reuters visited the Ulugan Bay area this week, workers were busy cutting through Palawan's forest, building an access road to Oyster Bay, which is otherwise only accessible by boat.
The 12-km (7.5-mile) long, two-lane paved road should be ready within a few months, the workers said.
When road construction began in October 2013, residents told Reuters their concerns: bars and brothels would mushroom while fishing might be declared off-limits because of the naval activity.
The Philippines once hosted a giant American naval facility at Subic Bay, northwest of Manila, until it was closed in 1992 following a Philippine Senate vote.
What still rankles with some Filipinos were the brothels in nearby Olongapo City - around 500 establishments according to one local non-governmental organisation.
Environmental activists oppose the road to Oyster Bay, but local residents have their eyes on China, which last month defended its reclamation in the Spratlys, saying the new islands would provide civilian services such as weather forecasting and search and rescue facilities that would benefit other countries.
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The majority of people in Macarascas supported the naval expansion plan, said Villarin.
Another Macarascas resident, Gerry Ginez, said a U.S. naval presence was needed to help protect the Philippines.
Carlos Quirante, head of the nearby village of Bahile, said he once opposed the base expansion, but could now feel tensions rising over China's island building.
"If this will help national security, who are we to oppose the construction of a naval base? Patriotism should be above personal interest," he said.