(AFP) The Philippines and Malaysia are stepping up efforts to counter terrorist threats, especially from the kidnap-for-ransom group Abu Sayyaf, the outgoing Malaysian envoy to Manila said today.

The Abu Sayyaf has alleged links with international fugitive Osama bin Laden, wanted for the September 11 terror attacks in the United States.

"There is already an exchange of intelligence information, the militaries have hotlines to each other and there is always close contact between the foreign ministries," ambassador Mohamed Arshad Hussain told AFP.

Arshad, who has been reassigned to another post after a two-year stint in Manila that he described as "eventful", said a proposed trilateral agreement to counter terrorism among Malaysia, the Philippines and Indonesia would "institutionalise whatever cooperation is taking place on the ground".

The 50-year-old Arshad had a harrowing experience last year when the Abu Sayyaf kidnapped more than a dozen hostages, including Malaysians and Europeans, from two Malaysian resorts and brought them across the border to the tiny island of Jolo in the southern Philippines.

Much to the chagrin of the local government in Jolo, the Malaysian career diplomat made a daring visit to the Abu Sayyaf jungle hideout to plead with them to release the hostages and allow a Malaysian Red Crescent medical team to examine them.

Closer ties

The hostage crisis stretched on for nearly a year before the hostages were finally released or rescued by the military.

"If at all something came out of this, Malaysia and the Philippines became closer in combating crime along our common border areas," Arshad said.

Arshad received the "Order of Sikatuna" award from Philippine President Gloria Arroyo on Wednesday for helping to enhance bilateral relations.

"I'm glad that the Malaysia-Philippines relations are back on track after the Philippine president's landmark visit to Malaysia," Arshad said.

Malaysia alsoset the stage for a ceasefire agreement signed between Manila and the largest Filipino Muslim rebel movement, the Moro Islamic Liberation Front, during Arroyo's visit to Kuala Lumpur in August, her first foreign foray since assuming power in January.