The announcement came after the two countries' defence secretaries held a phone call to discuss the drills, the situation in the South China Sea, and other recent regional security developments.

This year's Balikatan (shoulder-to-shoulder) drills to test the readiness of the joint militaries to respond to threats such as natural disasters and militant extremist attacks, will be scaled down.

Only 1700 troops - 700 from the United States and 1000 from the Philippines - will participate in the drills, which will start on Monday.

Previous exercises have involved as many as 7600 soldiers, said Lieutenant General Cirilito Sobejana.

"There will be physical contact but it is minimal," he said.

The Philippines has protested against the presence of Chinese boats inside its 320km exclusive economic zone at Whitsun Reef in the South China Sea, repeatedly asking China to move the vessels away.

Chinese diplomats insist the fishing boats were just sheltering from rough seas and no militia were on board.

In a phone call on Sunday between Philippine Defence Secretary Delfin Lorenzana and his US counterpart Lloyd Austin, Austin reiterated the importance of the Visiting Forces Agreement (VFA) between the two countries, according to a statement issued by Lorenzana's department.

The agreement provides the legal framework under which US troops can operate on a rotational basis in the Philippines.

Lorenzana committed to discussing the matter with President Rodrigo Duterte.

Duterte last year unilaterally cancelled the two-decade-old VFA in an angry response after an ally was denied a US visa.

The VFA's withdrawal period has twice been extended, creating what officials say is a window for better terms to be agreed.

Relations between the United States and its former Asian colony have been complicated since 2016 when Duterte, who has made statements condemning US foreign policy while befriending China, rose to power.

Duterte has said the US must pay more if it wants to maintain the VFA.

Australian Associated Press