The agreement will increase cooperation between the French and Philippine armed forces, "as well as the promotion of bilateral defence cooperation in relations to defence equipment, logistics and the defence industry", a statement by the embassy said.
It provides for "high-level visits to increase cooperation, consultations on defence policy, training and exercises to boost capacity, exchanges of information and the development of naval cooperation".
Philippine Defence Minister Voltaire Gazmin declared the agreement "essential" for his country's response to its defence and security concerns in a speech at the signing on Wednesday.
The Philippines is one of several Asian nations concerned by China's activity in the South China Sea.
Beijing's construction of artificial islands on reefs claimed by the Philippines and other neighbouring countries has also attracted criticism from the US, which has put more military resources into the region under President Barack Obama.
In 2012 China took over the Scarborough reef, which is inside the Philippines exclusive economic zone and rich in fish.
Manila then signed a new defence treaty with the US and appealed against the seizure to the permanent arbitration court in The Hague.
Unlike his predecessors, Duterte has said he is ready to talk directly to China about the disagreements.