MANILA (AFP) - The Philippines on Wednesday described the murder of a transgender Filipino as an "isolated incident" that must not derail ties with Washington after a US Marine was identified as a suspect, sparking anti-American protests.

The discovery Sunday of the murder in a northern city hosting thousands of US troops who took part in joint military exercises last week came amid talks aimed at raising the American military presence in the Asian country.

A police document showed authorities were preparing to file murder charges against Private First Class Joseph Scott Pemberton, identified by a witness as the last person seen with the victim, who was later found dead in a hotel room in the city of Olongapo.

"We call on all concerned not to lose sight of the bigger picture and to look at these (defence ties) as different issues," Philippine defence department spokesman Peter Paul Galvez said in a statement. "This is an isolated incident, albeit a tragic one." "If we don't have assistance, we will never develop our capabilities," he said.

The poorly equipped Philippine military is one of the weakest in the region.

It has been boosting its alliance with the United States, with which it has a mutual defence treaty, as part of efforts to upgrade its defence capabilities amid territorial disputes with China in the South China Sea.

In March, the Philippines and the United States signed a new accord that would allow American troops greater access to Philippine facilities in support of US President Barack Obama's so-called pivot to Asia.

However, construction of facilities to house the temporary US military presence has been held up by a legal challenge.

About 100 left-wing protesters staged a rally outside the foreign department on Wednesday, tying black ribbons on the compound's gate and demanding the Philippine government take custody of the US suspect.

A smaller anti-American protest was held outside the US embassy in Manila on Tuesday.

The suspect, along with several other Americans deemed by Philippine police as potential witnesses have been detained at a US warship used in the military exercises.

US Pacific Command chief Admiral Samuel Locklear has ordered the ship to remain at the port near Olongapo while the murder investigation is continuing.

Under a visiting forces agreement signed in 1998, the Philippines has jurisdiction over crimes committed by US forces unrelated to the training exercises.

However the US has custody of the suspects unless it agrees to a Philippine request to hand them over.

Manila would seek custody of the suspect once charges are filed, foreign department spokesman Charles Jose told AFP.