The American Administration is at present confronted with a set of apparently contradictory problems: how to close the unneeded military bases in its territory and how to retain its important military facilities and installations in the Republic of the Philippines, including the well-known Subic Naval Base and Clark Air Force Base. Studies undertaken by various United States’ Government agencies have estimated that the Defence Department could save from $ 1 billion to $ 5 billion annually by closing some of the unneeded bases out of a total of 3,800 located in various parts of the United States.1 And thus important Pentagon officials and key members of the US Congress are reportedly moving to stamp “surplus” on some of these bases with a view to closing them down.2 On the other hand, policy-makers in Washington still consider the US bases in the Philippines as “the irreducible minimum of American security and interests in the Pacific and the Far East.” And as part of the plan to retain the bases in the Philippines the United States Government recently approved a mini-Marshall Plan for the Philippine Republic. Negotiations to review the Military Bases Agreement (MBA) of 1947 began in April between the officials of the United States and the Philippines. The MBA has undergone more than forty amendments in the past four decades. But the current negotiations are significant because it involves extension of the term of the agreement that expires in 1991. Presence of foreign military bases and troops in a sovereign country has always remained a sensitive issue in international relations. After more than three decades since the signing of the MBA the Filipinos got their sovereignty formally extended over the US military bases in the Islands and the Filipino flags began to fly in US base areas since 1979. Yet the nationalist Fitipinos still continue to ask: Is national sovereignty compatible with American military presence on their soil? Are not these bases likely to invite attacks from America's adversaries? Is Philippines interest being served by US maintenance of bases on the Islands? Some Filipinos raised similar questions way back in the 1940s. But they did enter into a Military Bases Agreement with the Americans by virtue of which the US military presence is still continuing in the Philippine Islands. Why did they sign the agreement? What were the compulsions? How did it all happen? When similar sets of questions, among others of course, are being raised after four decades of changes in the national, regional as well as global power configuration, a journey to the past is perhaps called for, for clearer comprehension of the current situation. The present paper is based on archival materials and other primary source materials available in the United States. Secondary source materials available in India and the United States have been used in appropriate places.