Eighteen-year-old Celby prowls a busy street in Kota Kinabalu, hawking contraband cigarettes to the drivers of passing vehicles and cars parked at the sidewalk.

For several years now, the Filipino has made a living as an itinerant street vendor, selling smuggled goods which he says are brought in from the nearby international offshore financial island of Labuan.

"My parents are corn farmers in Zamboanga but life has been difficult, so we came to Sabah five years ago. Life is good here. It is easy for us to make money if we are hard-working," he said.

Celby is among hundreds of thousands of Filipino refugees and economic migrants who have settled in the Malaysian state of Sabah on Borneo island to escape the hardship of the southern Philippines, which is just a few hours away by boat.

But the teenager has no valid permit to stay in Sabah and - along with many others - has been on the run since Feb 26, when the state began one of its biggest sweeps against illegal immigrants in decades.

In the past two weeks, armed security personnel have bulldozed hundreds of immigrant colonies throughout the state and demolished thousands of rickety wooden houses built on stilts over shallow waters.

More than 7,000 Filipinos have been deported from Sabah this year, with some 3,000 to be sent home in the next few days.

Social problems

Officials say there are an estimated 100,000-150,000 illegals among some 600,000 immigrants in Sabah, but thousands of Filipinos slip into the state undetected each year.

There is also a permanent community of migrant Filipinos who have acquired Malaysian citizenship since the exodus began in the 1970s, when Mindanao island was wracked by a bloody separatist rebellion which has yet to be fully resolved despite peace efforts by Manila.

The growing immigrant population is a dilemma for Sabah. The state blames the illegals for social problems such as a rising crime-rate and the spread of diseases but also uses them as a source of much-needed cheap labour.

There is an estimated one Filipino to five Malaysians in the state and authorities are worried that Filipinos may one day outnumber the locals.

A slowing economy and security fears after Sept 11 terror attacks in the United States, and kidnappings by Filipino Muslim rebels from Malaysian resort islands in 2000, gave impetus to Sabah's renewed crackdown.

But some officials say it provides only temporary relief and there can be no real end to the problem until peace is found in Mindanao.

"To solve the immigrant problem in Sabah, we must get to the root of the problem, which is the conflict going on in southern Philippines," said Yong Teck Lee, a former Sabah chief minister.

"This demands a peaceful solution, a political settlement and a massive rehabilitation exercise including land reforms. Principally, the ball is in the court of the Philippines government."

Little cooperation

Apart from occasional joint patrols, Yong said there has been little cooperation between Malaysia and the Philippines to tackle the issue.

Manila's territorial claim to Sabah - dating back to the pre-independence days of a sultanate spanning both countries - is a stumbling block because Manila refuses to open a consulate in the state to issue Sabah-based Filipinos with necessary documents.

"They feel they can't have a consulate in their own country," Yong said of Manila's claim.

Many Filipinos have also been given fake or stolen identity cards by local politicians so they can vote in elections, further complicating the authorities' task in weeding out the illegals.

More than 75,000 identity cards were reported lost in the state between 1997 and 2001, officials said.

Sabah's problem has a familiar ring throughout Malaysia, which is home to about a million illegal immigrants, or 5.0 percent of the population, and some 750,000 legal foreign workers mainly from Indonesia.

The state's crackdown is in line with a tougher approach by the federal government, which announced last month that Indonesians can be hired in future only as domestic helpers and plantation workers after two riots in January by textile and construction workers.