The 1998 Visiting Forces Agreement (VFA) created a legal framework for the presence of US troops in the Philippines and for organizing joint military exercises.

Manila announced its decision Tuesday -- a move the US embassy in the Philippines called a "serious step" -- touching off a six-month countdown to the end of the deal.

"If they would like to do that, that's fine, we'll save a lot of money," Trump told reporters at the White House, touting his "very good relationship" with Philippines President Rodrigo Duterte.

Famously outspoken Duterte has threatened since his 2016 election to put an end to the Filipino-American alliance, with an eye toward cultivating relationships with Russia or China instead.

He specifically mentioned a desire to do away with the VFA again in January, after the US cancelled the travel visa of senator and former national police chief Ronald Dela Rosa.

The VFA is divisive in the Philippines, with leftist and nationalist critics arguing it guarantees preferential treatment for US service members accused of crimes.

Its defenders say ending the agreement would compromise the southeast Asian nation's ability to defend itself and undermine the US goal of containing Beijing's ambitions in the South China Sea.