MANILA, Philippines - Thousands of Philippine and American soldiers began annual war games on Monday near disputed waters in the South China Sea. The Philippines has territorial disputes with China over the South China Sea, which is said to be rich in energy deposits and carries about $5 billion in ship-borne trade every year.

Nearly 5,000 U.S. and Filipino troops will participate in the 11-day annual exercise, to be held in the Philippines' western island of Palawan, near the Spratlys, and in the northwest province of Zambales on the main island of Luzon, just 100 miles off Scarborough Shoal. Two U.S. amphibious ships, USS Peleliu and USS Germantown, are participating in the exercises. China has expanded its territory in the Gaven, Johnson South, Cuarteron and Chigua reefs in the Spratlys, reclaiming land to build islands to assert its claims. The Philippines has monitored the presence of more than 120 Chinese warships and fishing boats in the Spratlys in the first half of 2014, establishing firm control over disputed areas.

IN-DEPTH

- Reuters