The President made the admission even as the highest-ranking US representatives in the country reiterated that US participation in Balikatan 2002 was meant to train Filipino soldiers against terrorism and not to hunt down the Abu Sayyaf group.
Mrs. Arroyo also welcomed a congressional inquiry into the legality or constitutionality of the exercises, which some senators claim are violative of the Constitution.
The senators also demanded an intelligence briefing on the deployment of US servicemen in several locations in Western Mindanao to "observe" operations against the Abu Sayyaf group.
The Palace said in a statement it "welcomes a congressional inquiry into the matter to study the legal intricacies of the joint exercises and the type of US assistance our Armed Forces will receive under this years Balikatan."
The President herself told reporters during the groundbreaking for the P3.7-billion Batangas International Port project in Batangas City that she is willing to undergo severe criticism for the exercises because she is hopeful of the end result.
"We might finally crush the Abu Sayyaf (during the exercises). I am willing to weather the criticism because well succeed in the end," the President said.
But she stressed the exercises are within the law and reminded critics that the goal of the war games is to "help us get rid of brutal terrorist kidnappers and to allow all of us to live in peace."
"Our enemies are the Abu Sayyaf. They are international terrorists. They are no longer internal threats only. They are international threats," she said in an earlier radio interview.
"Secondly, the American soldiers will not be in front but behind our soldiers. They will just be watching our soldiers," the President added.
She refuted criticisms that US servicemen would be spearheading operations against the Abu Sayyaf, who are still holding American missionary couple Martin and Gracia Burnham and Filipina nurse Deborah Yap.
The President also dismissed arguments that Balikatan 2002s six-month schedule is too long.
She explained the six-month cycle is the "regular" length of military exercises the country has been undertaking with the US.
Mrs. Arroyo also noted that the number of US servicemen that would be participating in Balikatan 2002 would be much smaller than the 4,000 US troops that usually participate in previous exercises held under the Mutual Defense Treaty of 1951, Mutual Assistance Agreement of 1947, Mutual Defense Board pact of 1958 and the Visiting Forces Agreement of 1999.
The only difference, she said, was that the venue of the exercises would be transfered from Central Luzon to Western Mindanao.
"I want them to train our soldiers and I want them to bring their equipment here," she explained. "Because usually, if talks are successful, they usually leave the equipment they use in the exercises."
"In other words, if we add it all up, we will be getting more than the $100 million in (military) assistance that we will be getting fropm America," she added.
He pointed out the exercises is only one of several exercises conducted on a yearly basis and the only difference from previous exercises is that the exercises are no longer geared toward foreign aggressors.
"This is against domestic terrorists and it makes a lot of sense to have the exercises down in the region," Fitts said, referring to the transfer of the exercises to Western Mindanao from Central Luzon where they were usually held.
He said the US military advisers who are expected to join Filipino soldiers in Basilan where the local troopers are pursuing the Abu Sayyaf are only "forward observers."
"You really have to look at it as a mutual cooperative training effort where they will be transferring skills, tactics and coordination and well be learning about the way the Philippine military works," Fitts said.
He reiterated that only 50 US servicemen would be sent as "forward observers" in Basilan where the Abu Sayyaf are holding American missionary couple Martin and Gracia Burnham and Filipino nurse Deborah Yap.
While American troops would fire back if any group attacks them, Fitts said its unlikely that they would encounter the Abu Sayyaf after local troops recorded only 42 encounters with the group in the past three months.
At any rate, Fitts said he expects the couple to be freed before the war games "are too far underway."
He said that the hostages that the Abu Sayyaf seized from a Malaysian resort island of Sipadan in April 2000 were released after four to five months while American hostage Jeffrey Schilling was freed in April last year after eight and half months in captivity.
The Burnhams, seized from a resort in Palawan in May, have been held for seven and a half months already and Fitts argued the elimination of the bandits would have no bearing on the couples release.
Fitts made the remarks after US Defense Secretary Donald Rumsfeld said in Washington that the US troops in the exercises are mainly for training purposes.
"What we have currently going on is training and exercises and it is not a modest number. Its several hundreds plus," Rumsfeld said in an interview with radio reporters.
"Weve been friendly with the Philippines for many, many years and were happy to be providing assistance to them and training," he said.
Several government officials, including Vice President and Foreign Affairs Secretary Teofisto Guingona, were reportedly kept "out of the loop" on the military exercises.
Guingona lashed back at the Palace yesterday and encouraged the Senate to look into the legality and constitutionality of the exercises.
Some senators have already expressed concern on the exercises especially since it included exercise rules that were "unprecedented."
Former President Fidel Ramos, a Korean War veteran who later became military chief of staff and defense secretary before being elected president, also questioned why Guingona and US Secretary of State Colin Powell did not meet to talk about the exercises.
But Senate Minority Leader Aquilino Pimentel conceded that "the deployment of US troops in Basilan, Zamboanga and Sulu may be welcomed by the people" but he urged the President to lcarify its purpose, extent and duration.
Pimentel, an opposition lawmaker, urged Mrs. Arroyo to convene the National Security Council and brief its members on the details and mechanics of the military exercise.
"It is good that the US is providing us with some modern weapons and equipment and training our soldiers in counter-terrorist warfare but it would be best to let our troops do tha actual fighting against teh Abu Sayyaf," Pimentel said in a statement.
Pro-administration Sen. Sergio Osmeña III expressed concern at the "surprizes" unveiled by the military and demanded an intelligence briefing for the Senate.
"I have no idea how this military exercises is being conducted. What I am concerned about is, why all the secrecy?" Osmeña said. "There are certain legal niceties that must be observed so that the law is not violated."
Senate defense committee vice chairman Rodolfo Biazon, a former Armed Forces chief, said the presence of US servicemen in combat areas, the use of live ammunition as well as the length of the war games were all unprecedented.
"We have already told them that we cannot solve this problem by ourselves. We welcome the help but we must examine the legal and constitutional basis of this," Biazon said.
In the House, defense committee chairman Prospero Pichay expressed full support for the governments decision for an expanded US military presence to crush the Abu Sayyaf.
In a statement, Pichay said the US militarys entry into the Abu Sayyaf campaign "would ultimately help to speedily resolve the crisis, resulting in less loss of Filipino lives, especially those of the AFP forces and the civilian population in Basilan and Sulu.
"Enough is enough. If the entry of the US forces will more swiftly resolve the crisis, and their help is made according to our laws and the Constitution, then I am all for accepting their (Americans) help," he added.
"We should not be the hypocrites. I feel that the bulk of our people are in favor of accepting the help of the Americans," Pichay said.
Reyes also rejected opposition charges that the public was being kept in the dark.
"We have been very transparent about this. What we said is what it is," Reyes said.
The Arroyo administration has also put together a position based on the legal opinion of the Department of Justice which holds that the exercises are legal and constitutional.
Justice Undersecretary Manuel Teehankee expressed doubt that "there is any basis for apprehensions on constitutional infirmity.
"We are allies and we are a partner of the US," Teehankee said. "I think we should focus on the global effort and war against terrorism."
"This will be a joint effort under joint exercises. This will be very beneficial both for internal security, law and order and the global fight against terrorism," he added. With reports from Delon Porcalla, Aurea Calica, Pia Lee-Brago, Paolo Romero, Jess Diaz, Jose Rodel Clapano, Romel Bagares, Leo Solinap, wire services