Mrs. Arroyo handed out the reward during a ceremony at the Edwin Andrews Air Base here to honor those involved in the killing of Mujib Susukan, a senior leader in the Abu Sayaff terror group believed to have links to Osama bin Ladens al-Qaeda network.
The informant, whose face was covered by a handkerchief, was paid in bundles of P1,000 bills.
In her brief remarks Mrs. Arroyo said that the willingness of civilians to help security forces track down wanted terrorists showed the countrys resolve in fighting terrorism.
"The work of our brave men, including the valuable support of our civilian population, has truly made our fight against terrorism very successful, even compared to others in the region," she said.
Susukan was shot dead in February 2003 in a gunbattle in Indanan, Sulu, that claimed nine other lives.
Before his death Susukan took part in numerous abductions and killings, including the April 2000 kidnapping of 21 foreigners and Filipinos from a tourist resort in Sipadan, Malaysia. Most of the victims were freed only after huge ransom payments.
With Armed Forces of the Philippines (AFP) chief of Gen. Narciso Abaya and Southern Command chief Lt. Gen. Roy Kyamko looking on, Mrs. Arroyo also awarded a Medal of Valor to Col. Noel Buan.
Mrs. Arroyo pinned medals on Buan and the widows of two soldiers who were killed in an encounter with another Abu Sayyaf leader, Hamsiraji Sali.
Buan, who was wounded in the battle, was slated to receive the Distinguished Cross Medal, the second highest medal award. But his award was later "upgraded."
Buan and his men posed as farmers before they killed Sali and seven of his followers in close-quarter combat in Isabela, Basilan, on April 8.
"After assessing the manner of their difficult operation just to penetrate the ranks of Hamsiraji Sali and neutralize him and his followers, I have decided that his award will be upgraded to Medal of Valor," the President said.
The Medal of Valor is the highest medal and comes with a cash and scholarship award for members of the soldiers family.
The President said that the recent killing of several Abu Sayyaf leaders and the arrest of operatives of the Indonesia-based Jemaah Islamiyah changed the perception of several countries about the Philippine effort in the war against terrorism.
"I would like to take the opportunity to appreciate the positive assessment made by Australia, New Zealand, Canada and the United States in connection with the security situation in our country," she said. With Marichu Villanueva, Roel Pareño