China has offered to provide $14 million worth of small arms and fast boats to the Philippines for free, aiding President Rodrigo Duterte's war on drugs and fighting terrorism, Manila's defense minister said Tuesday.

The offer was made by China's Ambassador Zhao Jianhua during a meeting with Duterte late Monday night at the presidential palace, Delfin Lorenzana said, adding Beijing has also made available $500 million long-term soft loan for other equipment.

"China has given us a list of military equipment and we will go through it to find out what we really need," Lorenzana told reporters after giving out Christmas gifts to wounded soldiers at an army hospital in Manila.