President Donald Trump laid out a stark choice for North Korea's Kim Jong Un ahead of their planned summit next month.
Even without a final resolution, it is already clear which winners and losers are emerging.
News reports say that Pyongyang was questioning whether the summit between Kim Jong Un and President Trump can take place.
President Trump will meet with North Korea's Kim Jong Un in Singapore on June 12, Trump announced Thursday.
Mattis said last month that troop withdrawals could be considered if the parties reach solid agreement on denuclearization.
The Balikatan exercises opened with a ceremony at the main Philippine military camp in Manila.
Trump has previously said the meeting with Kim Jong Un will be held by the end of May or early June.
South Korean President Moon Jae-in has shaken off a suggestion that he receive the Nobel Peace Prize.
"Right now, I think there is a lot of reasons for optimism that the negotiations will be fruitful," Mattis told reporters.
The announcement comes amid a planned meeting set later this year between President Trump and the North Korean dictator.