Balikatan has taken place every year since the USA and the Philippines signed a mutual defence agreement in 1951.
The changes were made at the behest of Philippines President Rodrigo Duterte, who has been at odds with the USA and Europe over his extrajudicial killings of suspected drug dealers and users, as well as reluctance to provoke China over disputed territory in the South China Sea.
Over the course of 12 days the two militaries will test their aptitude in terror and disaster scenarios, but officials say there will be no live fire drills, which are created to shore up maritime security and defense.
"For the Australian Armed Forces, they will participate in some special operations and bilateral exercises, and for the Japanese it's more of HADR", Lactao said. "We hope it gets bigger", he said.
Other regular exercises have since been cancelled.
Duterte responded to criticism from then-US president Barack Obama by describing him using an offensive epithet and threatening to sever defence relations completely between the two nations. Last month, the U.S. president invited Duterte to visit him at the White House.
But Duterte said last week he may be too busy to accept an invitation by Trump to visit Washington, even though no date had yet been proposed for the trip.
Previous editions of the Balikatan exercises involved large-scale joint operations in or near the South China Sea, which China claims almost in its entirety.
The US and Philippines on Monday began their main annual military exercises with a smaller number of troops than previous years and also limited to anti-terrorist operations and disaster response.
Soldiers from Japan and Australia are also taking part in the "Balikatan" or "Shoulder-to-Shoulder" exercises in Manila, as was the case a year ago, local media reported.
The 11-day joint training exercise between Filipino and American troops was opened at Camp Aguinaldo by exercise directors Lt. Gen. Oscar Lactao and Lt. Gen. Lawrence Nicholson, with the latter saying they were expecting a "great" exercise with their counterparts.
The Philippines endures about 20 major storms a year that sweep in off the Pacific Ocean, many of them deadly. Duterte said he would honor every agreement the country has with foreign states. "Eliminating that will take out the insurance policy", Heydarian told AFP.