Spain's king Felipe VI decorated 38 ordinary citizen "heroes" on Friday, marking a first year on the throne in which he has tried to bring the monarchy closer to the people.

Alongside his wife Queen Letizia, the 47-year-old king hung Civil Order of Merit medals on men and women aged between 30 and 82 in a televised ceremony at the old Royal Palace in Madrid.

They included five local people who risked their lives to help victims after the deadly crash of an A400M military aircraft near Seville last month.

There were also immigrants, farmers, charity workers, businesspeople and scientists.

One of those honoured was Hugo Daniel Lopez, a Paraguayan immigrant who suffered severe burns when he rescued a 92-year-old man from a fire on Christmas Day.

"You are the ones who make Spain great," Felipe told them in a speech.

"Our political, economic and social progress would be incomplete and sterile if we did not apply the principles, values and examples of good behaviour that we are today recognising and honouring."

The new king said in his proclamation speech last year that he wanted "to make citizens and their concerns the axis of political action".

Felipe's father Juan Carlos handed over the crown a year ago in the hope his son could restore the monarchy's popularity, which plunged due to scandals during the recent economic crisis.

Felipe's sister Cristina has been called to stand trial for alleged tax fraud in a scandal centring on her husband's business affairs.

On June 11 Felipe announced he was stripping Cristina of her title as Duchess of Palma.

Juan Carlos himself sparked outrage by going on a luxury elephant-hunting trip in 2012 at the height of Spain's recession.

The monarchy's popularity rating sank to record lows under Juan Carlos but has recovered under Felipe, to 75 percent according to a poll in El Mundo newspaper and 81 percent according to another survey by El Pais.