Australia and the Philippines have signed a security pact that will allow them to hold joint counterterrorism exercises. Philippine President Gloria Arroyo says the accord will help modernize her country's armed forces and be invaluable in the fight against extremism. From Sydney, Phil Mercer reports.

Philippines President Gloria Arroyo has a press conference with Prime Minister John Howard in Canberra, Australia, 31 May 2007

Australia has promised to supply the Philippines with 28 high-speed gunboats. The accord also calls for large-scale joint military exercises.

President Arroyo said at a news conference in Canberra Thursday that Australia's cooperation will be invaluable in the battle against Islamic militants and communist rebels in the southern Philippines.

Mrs. Arroyo says her government is making good progress against what she described as "vicious killers" who, in her words, force their "evil ideology on the innocent."

She joined Australian Prime Minister John Howard in praising the security pact, which includes a legal framework for the temporary presence of Australian troops in the Philippines.

"This is an agreement that will help us to modernize and professionalize our armed forces," she said.

"I know the president is not complacent, and none of us can afford to be, and the greater cooperation, particularly training exercises involving counter-terrorism that will come out of the Status of Forces agreement is to be widely welcomed," Prime Minister John Howard said.

The Philippines has a similar accord with the United States, its former colonial master, which provides the island republic with millions of dollars in military aid.

Manila's agreement with Australia also includes a commitment to help tackle poverty and improve infrastructure.

Australia has been trying to strengthen security ties with its Southeast Asian neighbors to crack down on radical Islamic groups.

One such group, Jemaah Islamiyah, has been blamed for a series of bombings in Indonesia in recent years that have killed more than 90 Australians.