Philippine President Gloria Macapagal-Arroyo is expected to talk about military aid and anti-terror war with George W. Bush during her state visit to the United States on May 17 to 24.

The formal agenda for the meeting will be announced only immediately before the visit, but presidential spokesman Ignacio Bunye said the escalating situation in the southern Philippines "would most likely be discussed," the Philippine Star on-line news reported Wednesday.

"We will be talking about the global war on terrorism. We will be seeing what we can do, talking what we can do together to try to help support President Macapagal in her war on poverty in this country," the report quoted US ambassador to Manila Francis Ricciardone as saying.

Arroyo is expected to attend a state dinner given by her host President Bush at the White House on May 19.

White House spokesman Ari Fleischer said last week that Bush wanted to thank Arroyo and the Filipino people "for their stalwartefforts in fighting the war on terror, for being such a good and reliable ally to the United States."

American military aid to Manila jumped tenfold to about 20 million US dollars annually since Arroyo's last visit to Washington in November 2001.

On the economic side, Arroyo would seek duty-free trade privileges for key Filipino agricultural exports, Trade Secretary Manuel Roxas said earlier.

Arroyo suspended peace talks with the Moro Islamic Liberation Front (MILF) last week and threatened to declare the group a terrorist organization by June 1 unless it stops bombings and raids on Mindanao in the south.

The United States has offered to broker the stranded peace talks, but observers here said US troops may be involved to crush the rebels once the future negotiations collapse even under the USmediation.

Philippine Defense Secretary Angelo Reyes said in early May that an expanded Philippine-US joint military exercises will coverparts of North Cotabato and Zamboanga del Norte provinces where the MILF rebels operate.

The new venues are hotbed of the MILF, the biggest rebel group here which has been fighting for an independent Islamic state in the south since its establishment in 1978.

This is an add-on to the original plan to stage this year's joint war game coded Balikatan 03-1 in the southern island province of Sulu, a known lair of the notorious Abu Sayyaf bandit group.

Early this year, government soldiers overran a MILF camp in thesouth, allegedly a makeshift headquarters of the group. The MILF has been launching retaliations for its loss in the fields.