"We learn lessons from every international controversy," Presidential Spokesman Ignacio Bunye said in a statement. "It is time to move on."
US State Department officials have joined other allies in criticizing President Arroyos decision to withdraw the small Philippine peacekeeping contingent in Iraq a month early to meet the demands of insurgents threatening to behead captive Filipino truck driver Angelo de la Cruz.
Critics say it was a capitulation to terrorism that would likely encourage more hostage-takings.
Undertaking damage control over her decision, Mrs. Arroyo had earlier sought to reassure the United States and other allies that the Philippines remained committed to the global war on terrorism.
Relations with Australia worsened when the Department of Foreign Affairs (DFA) summoned Australian Ambassador Ruth Pearce on Wednesday to object to Canberras questioning the country resolve to combat terrorism.
Australian Prime Minister John Howard had blamed the Philippines for subsequent hostage-taking incidents in Iraq.
During a party for journalists in Manila late Thursday, Pearce acknowledged strains in relations between the two countries.
"I am confident that the differences we have encountered this week are differences respected by friends, siblings even, differences that do not threaten highly valued mutual interests and values," she said. Marichu Villanueva