Taiwan's government has issued a 72-hour ultimatum to the Philippines' government, demanding an apology over the fatal shooting of a Taiwanese fisherman.
The Taiwanese coastguard on Sunday dispatched four vessels to guard the disputed water where the shooting incident took place.
"The government is determined to protect our fishermen," cabinet spokeswoman Cheng Li-wen said in a statement as vessels headed towards the Bashi Strait, claimed by both governments, where the fisherman was killed on Thursday.
If the Filipino government fails to respond in a positive manner within 72 hours, the hiring of Philippine workers will be frozen.
Ao Ming-wei, the captain of the coastguard vessel Tainan Jian said his vessel was prepared to face provocation and the crew would fire against possible threats.
Taiwan has demanded Manila apologise and compensate the victim's family or face a freeze on the hiring of its nationals.
It also asked the Philippines to bring to justice the coastguards responsible and start negotiating a fisheries agreement.
"If the Filipino government fails to respond in a positive manner within 72 hours, the hiring of Philippine workers will be frozen," presidential office spokeswoman Lee Chia-fei said on Saturday.
There are about 87,000 Philippine domestic helpers and other workers in Taiwan and they send home hundreds of millions of dollars a year.
Lee said other sanctions could include recalling the Taiwan ambassador to the Philippines and asking the Philippines ambassador to Taiwan to return to Manila to assist the investigation.
More than 50 bullets hit the ship, killing skipper Hung Shih-cheng.
"This is nothing but a slaughter," prosecutor Liu Chia-kai said after examining the ship.
Several fishermen's groups said they plan to file a protest at the Philippine mission in Taipei Monday.
In Manila Abigail Valte, a spokeswoman for President Benigno Aquino, said on Saturday that authorities had launched a "transparent and impartial investigation" into the incident.
She expressed hope that economic ties with Taipei would not be affected and added that the coastguard crew involved in the incident had been temporarily suspended from duty to ensure a fair inquiry.
Philippine coastguard spokesman Commander Armand Balilo said on Friday that the incident took place in Philippine waters and the crew had been carrying out their duty to stop illegal fishing.
"If somebody died, they deserve our sympathy but not an apology," Balilo told reporters.
The victim's son, who was with his father and two other sailors on the boat at the time, has insisted they did not cross into Philippine waters.
The incident comes at a time of heightened tensions around the region over rival claims to the nearby South China Sea.
China, the Philippines, Taiwan, Vietnam, Malaysia and Brunei all have competing claims to parts of the sea.
China's state media stood by Taiwan over the latest incident, asking Beijing to "teach Manila a lesson".