MANILA -- Philippine President Rodrigo Duterte is set to decide "anytime now" on the extension of a key military pact with the U.S., which has been improved following negotiations, diplomats said on Friday.

Defense officials have been holding their breath over the fate of the Visiting Forces Agreement, which eases the entry of U.S. forces into the Philippines for routine military drills.

The high-stakes decision by Duterte comes as China ramps up its presence in the disputed South China Sea. The Philippine military recently reported spotting hundreds of Chinese "militia" vessels within Manila's maritime zones.

"It's now in the office of the president, and I expect it to come out anytime now," Philippine Ambassador to the U.S. Jose Manuel Romualdez said in an online media briefing with his U.S. counterpart in Manila, John Law, to talk about the 75th anniversary of their countries' diplomatic relations.

"And we're very hopeful ... that the VFA will continue, because it's an important piece of agreement," Romualdez added.

Duterte unilaterally abrogated the 1998 military pact early last year in response to Washington's suspension of the visa of one of his political allies. Duterte later suspended the termination twice, allowing officials to enhance the agreement. The pact will end in August if Duterte decides to finally terminate it.

But diplomats from the U.S. and the Philippines said the pact has been improved and strengthened.

"I know that it's been an improvement, and a lot of time has been spent by both our countries, our panels, to discuss some of the things that they wanted to improve in that agreement," Romualdez said.

Law, for his part, said, "There have been some very specific proposals related to how we can clarify and strengthen the implementation of the VFA."

Romualdez said the military pact operationalizes the 1951 Mutual Defense Treaty, which analysts describe as the bedrock of the two nations' alliance. The Biden administration has assured the Philippines that an armed attack on a Philippine vessel in the South China Sea would trigger Washington's obligations under the treaty.

"We think the VFA has been a fundamental part of helping make the Mutual Defense Treaty successful," Law said. "We are committed to the success of our alliance with the Philippines, and that commitment is going to remain strong."

Duterte earlier said the U.S. must pay up if it wants to continue the agreement. In December, he said Washington must deliver millions of vaccine doses if U.S. troops were to stay in the Philippines.

The Biden administration this week announced plans to donate 80 million doses of COVID-19 vaccines to other countries. Law on Friday confirmed that the Philippines, which has one of the worst virus outbreaks in the region, will be one of the first recipients.

But as Duterte evaluates the proposed extension of the Visiting Forces Agreement, Romualdez early this week said Washington's donation was "without any strings attached to it, so to speak."

Ella Hermonio contributed to this report.