Duterte's office said the Philippine president and Austin 'had an open and frank discussion of the status and future direction' of the Philippines-US ties [Robinson Ninal/Malacanang Handout Photo via Reuters]

MANILA, Philippines -- President Rodrigo Duterte has restored a pact governing the presence of US troops in the Philippines, the two countries' defense secretaries announced, retracting a decision that had caused increasing concern among policymakers in Washington and Manila..

Philippine Defense Secretary Delfin Lorenzana and US Defense Secretary Lloyd Austin announced the restoration of the Visiting Forces Agreement (VFA) in a joint news conference in Manila on Friday.

The VFA, originally signed in 1988, provides rules for the rotation of thousands of US troops in and out of the Philippines for war drills and exercises. It gives US military aircraft and vessels free entry into the Philippines and relaxes visa restrictions for US military personnel.

It is seen as important to Washington being able to act to protect the Philippines under the 1951 Mutual Defense Treaty between the two nations. It has assumed additional importance as the United States and its allies contend with an increasingly assertive China, particularly in the disputed South China Sea.

"Let me thank President Duterte for his decision to fully restore the visiting forces agreement," US Defense Secretary Lloyd Austin said on Friday in a joint press briefing with his Philippine counterpart, Delfin Lorenza.

Duterte's decision provides the US "some degree of certainty going forward", he said, noting the US role in "counterinsurgency efforts" in the southern island of Mindanao.

"We can plan further in advance and with that long-range planning, we can actually do more comprehensive exercises."

The US Embassy in Manila also welcomed the news saying that the agreement "strengthens not only the security of our two nations, but also the rules-based order" in the region.

President Rodrigo Duterte had previously vowed to terminate the agreement, but had repeatedly pushed back the expiration date, Reuters reported, maintaining it until the end of the year.

Lorenzana said he was unsure why Duterte had changed his mind but made the decision after meeting Austin in Manila on Thursday night.

"Our countries face a range of challenges, from the climate crisis to the pandemic," he said, adding that the Philippine-US alliance "will remain vital to the security, stability and prosperity of the Indo-Pacific."

"A fully restored VFA will help us achieve that goal together."

In a statement on Friday, Duterte's spokesman Harry Roque said the president's decision was "based on upholding the Philippines strategic core interests".

"The Philippines will, however, continue to engage other countries for partnerships that work, based on our core national interests."

With reports from CNN, Aljazeera and Reuters