Japan will build four coast guard radar stations on islands in the Sulu Celebes Seas separating the Philippines and Indonesia to help Manila counter a surge in piracy by Islamic insurgents, two sources said.

An agreement to fund the facilities and provide training to local coast guard personnel may be signed as early as next week by Prime Minister Shinzo Abe and Philippine President Rodrigo Duterte in Manila, the sources said.

"The seas in that area are an important waterway for merchant ships traveling to Japanese ports," one of the people with knowledge of the plan said. The sources asked not to be identified because they are not authorized to talk to the media.