I take it your named as the father your child's birth cert ? was you married b4 or after he was born ?
but basically if you was born in the uk , then your child born in the phils is British by descent. and you can register and apply for a British passport for the child.
yes settlement visa is £515 for each person, so you can save yourself the £515- the cost of a British passport for the child, also you will save £200+ when it comes to naturalisation for the child.
i don't think you need to complete the va4 form for the child if you get him a british passport, but you can put your child details down on your wife's form.
DNA tests, i dont think you need that. if your named as the father on the birth cert that should be good enough.