TAIPEI (REUTERS) - Taiwan has issued an ultimatum to the Philippines to make an official apology to the family of a Taiwanese fisherman who died in a fatal shooting by the Philippine Coast Guard in waters off the northern Philippines or pay a price.

The Philippines and Taiwan, as well as China, Brunei, Malaysia and Vietnam, are embroiled in diplomatic rows over territory in the South China Sea, potentially rich in oil and gas and criss-crossed by crucial shipping lanes. The disputes have sometimes escalated to confrontation between vessels.

A Philippines fisheries official said one of its vessels, acting under the threat of being rammed, opened fire last Thursday on a Taiwanese fishing boat 170 nautical miles southeast of Taiwan, killing one person on board.

Philippines presidential deputy spokesperson Abigail Valte said on Sunday the head of the de facto Philippine embassy in Taiwan had apologised and offered his condolences to the family.

Asked if the apology was an acknowledgement that the Philippines authorities made a mistake, Ms Valte said it was more of an "expression of heartfelt sorrow at the unfortunate incident," stressing that investigations are ongoing and it would be better to wait for the results of the probe.

But Taiwan is not satisfied with the Philippines actions.

"If the Philippines presidential office continues to respond to our request in such an attitude... They will have to pay a price," according to a statement from Taiwan's presidential office.

Taiwan will freeze all new applications of Filipinos to work on the island, local media reported.

There are currently 80,000 Filipinos working in Taiwan.