MANILA (Updated 4:30 p.m.) — China expressed "strong indignation" Friday after the Philippine flag was placed on the coffin of a dismissed policeman who took several Hong Kong tourists hostage and killed eight, the latest fallout from bloodshed that has strained Manila's ties with Beijing.

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Television footage showed the flag draped over the coffin of Rolando Mendoza, who was killed by a police sniper Monday after he opened fire on the Hong Kong tourists he had held hostage for a day while demanding his job back. The 55-year-old was a decorated officer who was once cited by the police force as one of the "10 outstanding policemen" in the Philippines.

Mendoza's family had placed the flag on the coffin, which was displayed in their hometown in Batangas province, south of Manila, ahead of the funeral Saturday. They removed it after China's protest.

"The person who deserves a national flag at funeral should be someone of heroism, decency and integrity, not someone who inflicts atrocity on innocent lives," the Chinese Embassy said in a terse statement.

"This is nothing but a smear on the dignity of the Philippine national flag," it said.

It added that it condemns "the brutality of the criminal and expresses its strong indignation over this irritating act."

Mendoza opened fire after police bungled negotiations with him, a mistake that has already caused dismay in Beijing and Hong Kong although the spat did not result in a recall of ambassadors. Philippine President Benigno Aquino III said he "begged for understanding" while promising to punish those responsible.

In Malacañang, Presidential Development and Strategic Planning Secretary Ricky Carandang said the government did give the order required for draping a national flag on Mendoza's coffin, who had received medals while in service.

“Nobody from the government has ordered that,” Carandang said.

Carandang presumed that it was the family of Mendoza who decided on the use of Philippine flag.

Philippine National Police spokesman Agrimero Cruz also said police authorities did not give such order.

"When he took hostages, all his decorations have lost their meaning," he said.

China's Foreign Ministry on Thursday pressed Manila to complete the investigation of the hostage crisis "as soon as possible."

Internet users mostly from Hong Kong and China were already incensed by photographs posted on social networking sites a day after the tragedy showing curious Filipino onlookers, including some police officers, smiling with the bullet-riddled bus in the background.

But others, including three of Aquino's sisters, placed flowers, lit candles and offered prayers.

Manila police chief Rodolfo Magtibay told a Senate hearing on Thursday that he gave the order to assault the bus carrying a Hong Kong tour guide and 20 tourists after hearing shots following a breakdown in the negotiations with Mendoza. He said he believed his team was equipped and ready.

Mendoza, who was dismissed last year on charges of extortion and grave threats, released several children and elderly hostages early on, but later shot at the remaining 15 people. Eight were killed before a police sniper took him out and seven others were rescued, some of them seriously wounded.

Philippine officials are now bracing for the economic backlash after Hong Kong authorities urged its citizens not to travel here.

About 140,000 Hong Kong tourists visit the Philippines yearly. National carrier Philippine Airlines said at least 558 tourists from Hong Kong and China have canceled their bookings.

Concerns also were raised about the future and safety of more than 100,000 Filipinos working in Hong Kong, mostly as maids, who contributed to the $17.3 billion sent home in 2009 by about 9 million overseas Filipinos — remittances that keep the economy afloat.

Philippine opposition leader Rep. Edcel Lagman called for the resignation of the interior secretary and heads of the president's communications group, saying the Aquino government "failed miserably" in handling the crisis.

The daylong standoff between the hijacker and police — broadcast live on TV — shocked residents in Hong Kong, a safe, affluent city that rarely sees violent crimes.

Magtibay has taken leave and four leaders of the assault team that eventually stormed the bus have been relieved pending an investigation. Officials have said the firearms used by 200 police commandos will be subjected to ballistic tests to see if some of the hostages were hit by police gunfire. (AP/Jill Beltran/Sunnex)