The national police chiefs of the two countries met on the sidelines of Indonesian President Bambang Susilo Yudhoyono’s ongoing state visit to Manila, a police statement said.
The two forces would enhance existing bilateral cooperation agreements for "preventing and suppressing terrorist activities," it said.
They would coordinate the "apprehension as well as interrogation of apprehended suspected criminals and terrorists," and share "technical and operational expertise."
The two police chiefs also agreed to a "regular exchange of information and fugitives."
Earlier this month, Virtus Gil, a senior security adviser to Philippines President Gloria Arroyo, said two Jemaah Islamiyah (JI) figures linked to the 2002 Bali bombings were hiding in the southern Philippines, indicating a possible shift there by the militant network.
Gil named the two fugitives as Omar Patek and Dulmatin, who he said had been seen in recent weeks on the island of Mindanao, the hotbed of a decades-old Muslim separatist insurgency.
"There is a possibility, although it is subject to validation, that the JIs may have shifted their strategic base here in the country," Gil added.
The Moro Islamic Liberation Front (MILF) has waged a bloody rebellion in Mindanao since 1978, but it is now engaged in peace talks with Manila and has vowed to hunt down JI militants.
MILF has denied links with JI, the alleged front of Osama bin Laden’s Al-Qaeda network that is seeking to create a Southeast Asian Islamic state.
Dulmatin, whose real name is Joko Pitono, helped assemble the Bali bombs that killed 202 people, mostly foreign tourists, in October 2002, Indonesian police said. — AFP, Cecille Suerte Felipe