US President Barack Obama arrives in the Philippines shortly on the final leg of his Asia tour, as the two sides signed a military co-operation deal.
The deal, signed in Manila, allows a bigger US military presence in the South East Asian nation.
It comes with Manila embroiled in a bitter territorial dispute with Beijing over parts of the South China Sea.
During his visit, Mr Obama will hold talks with President Benigno Aquino and attend a state dinner.
‘Dialogue, not intimidation’
The 10-year deal was signed by Philippine Defence Minister Voltaire Gazmin and US Ambassador Philip Goldberg on Monday morning.
Under the agreement, the US will have better access to military bases, ports and airfields. US troops would rotate through these facilities and engage in joint training, officials said.
In a statement, Foreign Secretary Albert del Rosario described it as “milestone in our shared history as enduring treaty allies”.
“The EDCA [Enhanced Defence Co-operation Agreement] elevates to a higher plane of engagement our already robust defence alliance, a cornerstone of peace and stability in the Asia-Pacific region.”
However, the presence of foreign troops is a sensitive issue in the Philippines, a former US colony.
Anti-US activists who say the deal will not benefit the Philippines and harms its sovereignty are expected to march near the presidential palace while Mr Obama meets Mr Aquino.
The US used to have large bases in the Philippines but these were closed in the early 1990s. US troops have also been active in the southern Philippines, where al-Qaeda-linked militants are based.
In recent months, however, Washington and Manila have moved to strengthen ties again, as the Philippine relationship with China has deteriorated amid a more assertive stance from Beijing on its territorial claims.
China claims a U-shaped swathe of the South China Sea – an area that includes territories that several South East Asia nations say belong to them.
In 2012, ships from China and the Philippines were involved in a long stand-off at the Scarborough Shoal.
More recently, the Philippines has accused China of blockading sailors stationed aboard a navy ship that has been grounded on a disputed reef for years.
Manila has initiated action against China on the territorial issue at the UN court, although China says it will not take part in the process.
Ahead of his visit, Mr Obama told broadcaster ABS-CBN that rows should be resolved through talks.
“I’ve been clear and consistent in stressing that the United States and China need to support efforts among claimants to peacefully manage and resolve maritime and territorial issue through dialogue, not intimidation, including in the South China Sea,” he said.
The US president has already visited Japan, South Korea and Malaysia. He is not visiting Beijing on this occasion.