The Decision to install a new colonial goverment instead of a loyal client state seems rather odd to me, especially considering that at the time the indigenious population had their own revolution going against the spanish and later the US.
US involvement in the Philippines wasn't so much an occupation as it was ownership. Now, that may be entirely semantics. I argue that the distinction is important here. This wasn't a temporary thing like an occupation might imply. After the Spanish-American War the US and Spain sign the Treaty of Paris of 1898. This treaty would cede Guam and Puerto Rico to the United States and guarantee the independence of Cuba*. The US would also purchase the Philippines for a sum of 20 million dollars. Therefore, the Philippine islands would become property of the United States of America. The provisions of the treaty would also allow Spain to operate maritime trade in the Philippines for a period of ten years, ensuring continued Spanish influence on the local culture.
This will become important as the United States has now launched itself onto the world stage as a colonial power. The United States would establish The United States Military Government of the Philippine Islands in 1898 to oversee the governance of the new territory. The term territory is also important. The US now effectively owned colonies, but would not refer to them as such. We must be careful to remember that the US was very sensitive to the fact that it was also a former colony. That sort of conflict of identity would be averted by naming them much like they would a continental territory. For all intents and purposes, however, the Philippine Islands were a US colony. The military government would almost immediately come into conflict with the local population.
Prior to the US involvement in the Philippines, Spain had been fighting against an insurrection on the islands. In 1896 the Philippines openly revolted against the Spanish empire. By 1898 all but Manila had fallen to the revolutionary forces of the First Philippine Republic. Later that year the United States would take possession of the island and the fight would renew. Revolutionary forces would fight with the government of the United States from 1899-1902 when the First Philippine Republic would be dissolved. This would result in the turn over of governance from the military to a civil government established by the US. The Philippines Bill of 1902 would finally establish The Insular Government of the Philippine Islands and solidify the islands as US holdings until their loss to the Japanese Empire in 1941.
Before the war with Spain, manifest destiny had mean that the US was destined by God to span "from sea to shining sea." The idea that the US would span the North American Continent from Atlantic to Pacific. By 1848 and the conclusion of the Mexican-American war it appeared that this destiny had been fulfilled. The border dispute in Oregon had been settled by 1846 and California acquired in 1848. There then was an intense period of internal conflict resulting from this fulfillment. The climax of which resulted in the American Civil War. However, once reconstruction in the United States is ending the nation begins to turn again to manifest destiny. This time, however, Americans have imperial ambitions. Those ambitions would directly result in the Spanish-American war. This ambition can be seen clearly in the publications of the time, specifically those of William Randolph Hearst. Hearst was one of the leading newspaper men in the nation at the time and is responsible for inflammatory pieces such as "Cuba Must Be Free!" (1896) and "The Duty of Congress" (1897).
The intense drive of Manifest Destiny and the desire for a national goal brought the US out into the world. While the European powers carved up Africa, the US turned its eyes to Latin America and the Pacific. The Philippines would become a part of the fulfillment of manifest destiny. It allowed for the continuation of American expansion and gave the nation a lofty goal to aspire to. McKinley would even go on to say that God told him to annex the islands (Pg.19). There was a certain mystic quality about the idea of manifest destiny that wholly captured the attention of the American people. It drove them to demand war out of a rather reluctant President McKinley. It drove thousands of young men to volunteer for what they saw as an adventure. The military provided an opportunity for honor and adventure to the young man of the time. Most famously of all was the "Rough Riders" unit formed by Theodore Roosevelt. Roosevelt had resigned his position as Assistant Secretary of the Navy to form the regiment^(1). The Philippines had become a part of manifest destiny.
The Philippines were not only valuable as a base in the pacific or the fulfillment of manifest destiny. The islands had been fertile sugar and timber producers. However, Congress forbade the sort of colonial exploitation that was common with European powers. Individuals and corporations were forbidden from acquiring large landholdings (Pg.22). This didn't prevent the age old colonial trade dilemma of monopoly. The United States provided the Filipinos with a tariff-free import market, putting almost everyone else out of the running. This was, perhaps, one of the many unintended consequences that president McKinley had warned about prior to the war with Spain. While this wasn't one of the motivators to acquire the Philippines, it would become a motivator to keep them. With a market totally reliant on American imports, there was a great deal of capital to be gained.
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Suggestion for Further Reading: In Our Image: America's Empire in the Philippines by Stanley Karnow
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^(1) Jones, Virgil Carrington. Roosevelt's Rough Riders. Garden City, NY: Doubleday, 1971.
*Cuba would be effectively controlled by the US under the Platt Amendment to the Cuban-American Treaty of Relations of 1903. This is evidenced by further US intervention in Cuba via the Cuban Pacification (1906-1909).