"I am honored to accept President (Gloria) Arroyo's generous invitation to visit the Philippines this fall," the US president said.

The visit is due to take place in October, on the sidelines of the Asia-Pacific Economic Cooperation summit that is scheduled to be held in Thailand.

The announcement came during a joint press conference with Arroyo, honored here with just the third state visit Bush has hosted since taking office, and the first by an Asian leader.

Arroyo said she was especially pleased that her country has come to be seen as a major US partner in the global war on terror.

"I welcome the support of the world, and I welcome the support of the US," she said.

If terrorism is allowed to flourish, "it will spread like SARS," said Arroyo, who said that in the Philippines "terrorism thrives not coincidentally ... in the regions that are the poorest in our country."

The Philippines has been described as a "stalwart ally" in the anti-terror battle by top US officials who hope to send a message to the Philippines, as well as other states in Asia and beyond, of the benefits to allies that join its anti-terror campaign.

"President Arroyo has welcomed American troops to train and advise their Philippine counterparts" in anti-terror operations, the US president said.

"She has been a leader in building broader cooperation" throughout Asia he said.

Bush said Monday he would designate the Philippines a "major non-NATO ally" enabling Manila to buy US surplus military material on a priority status, obtain US military loans, benefit from training programs and increased research and development cooperation, and permits US forces to stockpile war material on its territory.

The US president said the two countries in the future would work together "work together on military research and development and give the Philippines greater access to American defense equipment and supplies."

Bush, while acknowledging the terrorists who plotted and carried out the September 11 attacks on New York and Washington were economically comfortable, but said that economic aid is is an essential component in the war against terror and in the assistance being provided to Manila.

"It's important to understand, people are susceptible to the recruitment by these extremists," Bush said.

"One of the things you got to do is make sure we distinguish between hate and poverty," he said.

"It's not poverty that causes terrorism. Terrorism breeds poverty and poverty breeds on terrorism. They reinforce each other. That's why I put them together," Arroyo added.

"I came to Washington not just about terrorism, but fighting poverty, fighting -- for the sake of the fight," she said.

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