Former Prime Minister Dr Mahathir Mohamad will discuss Manila's efforts to make peace with Muslim separatist rebels when he meets Philippine President Gloria Arroyo this week, her spokesman said yesterday.

Mahathir will meet Arroyo for dinner tonight before his speech to the Philippine Business Conference on Tuesday, Foreign Secretary Alberto Romulo said.

Arroyo will likely thank Mahathir for his role when he was in power in fostering the resumption of peace talks between the Philippine government and the Moro Islamic Liberation Front (MILF).

Romulo said Mahathir, who is credited with developing Malaysia's economy, would also discuss the Philippines' efforts to avoid a looming fiscal crisis.

"The president said she would welcome any advice that Dr Mahathir may wish to give," he added.

Malaysia has hosted the resumption of peace talks between the government and the MILF and is leading a mission from Muslim countries, to monitor a ceasefire in place between the two sides in the strife-torn southern Philippines.

Regional terror network

The 12,000-strong MILF has been fighting to set up a separate Islamic state in the southern third of this largely-Christian archipelago.

However the rebels signed a truce with Manila two years ago and denounced foreign terrorist links, paving the way for the reopening of peace negotiations.

There have been allegations by security officials that the MILF is still sheltering members of the Jemaah Islamiah regional terror network in its camps in the south. MILF leaders deny this.

Officials also said Arroyo would thank several leaders of Southeast Asian and European nations for supporting the peace process with the MILF when she attends the Asia-Europe Meeting (Asem) in Hanoi from Oct 7 to 9.

"With the arrival of the international peace monitors and sustained cessation of hostilities between the MILF and our military, the president can inform world leaders present at the Asem summit that the... peace agenda is now at an advanced stage," said Arroyo spokesman Ignacio Bunye.