WASHINGTON—The U.S. military has launched a new counterterrorism mission in the Philippines, making operations there eligible for the same funding used to finance the long-running wars in Afghanistan and Iraq, military officials said.

The decision by the Trump administration to elevate the U.S. mission to an Overseas Contingency Operation, or OCO, was made last September in response to a Philippines government request for more support to fight extremist groups, officials said. The U.S.-backed Philippine military in October ousted Islamic State-affiliated insurgents from a city on the southern island of Mindanao after a five-month battle, but faces an enormous rebuilding task.

Between 200 and 300 American troops are currently serving in advisory roles in the country and officials said that number is likely to remain unchanged for now. In addition to advisory troops, technical support and equipment, the mission is providing intelligence, surveillance and reconnaissance by drone.

The administration’s decision reflects improving ties between Washington and Manila, which soured after former President Barack Obama criticized Philippine President Rodrigo Duterte over human-rights violations allegedly committed during a violent crackdown on drug use. Mr. Duterte responded by lobbing repeated verbal attacks on the U.S. and publicly cursing Mr. Obama in local Tagalog. President Donald Trump has sought common ground with Mr. Duterte, inviting him to the White House and saying the two had a “great relationship.”

The Philippines has been home to various insurgent groups for decades, but security challenges escalated last May when an extremist group known as the Maute seized control of the city of Marawi. The U.S. military supported the Armed Forces of the Philippines in its campaign to oust the insurgents. At least 165 Philippine security personnel and 47 civilians died during the five-month battle. Officials estimate around a 1,000 militants were also killed.