The Philippines and Australia are working towards a new defence agreement to be signed next year, their defence ministers said on Friday, as both nations seek to step up military cooperation to deal with shared security challenges in the Indo-Pacific.

The Philippines and Australia are willing to deepen their defense ties through an agreement, the two nations' defense chiefs said Friday.

Australia has launched its largest military exercises with Philippine forces, involving over 3,600 personnel in live-fire drills and a beach assault near the South China Sea.