Exercise Balikatan is the most prominent annual military exercise between the Philippines and the United States. The Tagalog word balikatan means "shoulder-to-shoulder". The exercises have been the cornerstone of Philippines–United States military relations since the closure of all 5 U.S. bases in the Philippines, but reopening under EDCA agreement has resulted in 13 American Military bases in Philippines as of 2023.

Australian armed forces have participated in Balikatan exercises annually since 2014. Australia has a visiting forces agreement, a type of a status of forces agreement, with the Philippines called Philippines–Australia Status of Visiting Forces Agreement. The Philippines is open to other allied countries participating, provided that they too have a similar forces agreement.

The U.S. acquired the Philippines after the Spanish–American War of 1898 and the subsequent Philippine–American War. The United States granted the Philippines independence in 1946. In 1951, the governments of the United States and the Philippines signed the Mutual Defense Treaty to "strengthen the fabric of peace" in the Pacific by agreeing to defend each other's territory in the case of external attack. In line with this treaty, the United States maintained until 1992 several military bases in the Philippines, including U.S. Naval Base Subic Bay and the Clark Air Base.

In 1998, following the bases' closure, the Visiting Forces Agreement (Philippines – United States) (VFA) was signed which contained guidelines for the conduct and protection of American troops visiting the Philippines, and stipulated the terms and conditions for the American military to enter Philippine territory. The VFA is a reciprocal agreement in that also outlines the requirements for Philippine troops visiting the United States.

The Visiting Forces Agreement led to the establishment of the Balikatan exercises, as well as a variety of other cooperative measures.

The Balikatan exercises are designed to maintain and develop the security relationship between the two countries' armed forces through crisis-action planning, through enhanced training to conduct counterterrorism operations, and through promoting interoperability of the forces.

Over the years the exercises have expanded to include surrounding other countries in Southeast Asia. The training has had a shifting focus. During the U.S.-led "War on Terror" the annual Balikatan Exercises focused on training for counterterrorism missions. There were student protests in the early 2010s over the continued presence of U.S. troops in the Philippines.

These military exercises contribute directly to the Philippine armed forces' efforts to root out Abu Sayyaf and Jemaah Islamiyah and bring development to formerly insurgent-held areas, notably Basilan and Jolo. They include combined military training and civil-military operations and humanitarian projects. The International Military Education and Training (IMET) program is the largest in the Pacific and the third-largest in the world. A Mutual Logistics Support Agreement (MLSA) was signed in November 2002.^{[citation needed]}