Philippine Defence Minister Voltaire Gazmin and US ambassador Philip Goldberg signed the 10-year pact, which is seen as another element of Obama's effort to focus US military and economic attention more heavily on Asia.
Obama said the deal would see more US troops rotate through the Philippines for joint military training exercises, but emphasised there would be no return of permanent American bases.
"Greater cooperation between American and Filipino forces would enhance our ability to train, exercise, and operate with each other and respond even faster to a range of challenges," Obama said in a written response to questions by local television network ABS-CBN ahead of his visit.
Obama was due to arrive in the Philippines from Malaysia on Monday afternoon for a two-day visit, the final leg of an Asian trip that also took him to Japan and South Korea.
The United States and the Philippines are already long-time allies bound by a mutual defence pact, and engage in regular war games that see thousands of US troops and state-of-the-art American military hardware brought to the Philippines.
China claims most of the South China Sea, even waters close to the Philippines and other countries in the region.
Brunei, Malaysia and Vietnam, as well as Taiwan, also have overlapping claims to the sea.
As tensions over the South China Sea have heated up, the United States has sought to strike a balanced strategy by seeking to reassure its allies in Asia while emphasising to China it takes no sides on the dispute.
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