The Kingdom of Saudi Arabia has extended a $20 million soft loan to the Philippine government to rebuild the areas that were affected by the armed conflict between the military and the Moro Islamic Liberation Front (MILF) in central Mindanao, southern Philippines, a presidential statement said.

President Gloria Arroyo acknowledged Saudi Arabia's support and thanked King Fahd, Custodian of the Two Holy Mosques , through Ambassador Saleh Mohammad Al Ghamdi for the loan.

Arroyo earlier called on the Organisation of Islamic Conference (OIC) and its member states to help in the rehabilitation of Mindanao, which has been savaged by more than three decades of a Muslim-Christian conflict.

Arroyo also thanked Malaysia and Libya for their plan to invest in a palm oil project in Basilan, near port Zamboanga City, a stronghold of the Abu Sayyaf extremist group.

"We invite all the other OIC member states to invest in Mindanao as the peace and development process shifts into high gear," said Arroyo. "I hope that now that we are reaching a new stage of peace and development, the support will continue to be forthcoming and will be even greater."

Brunei Darussalam Ambassador, Dato Paduka Haji Yahya, lauded Arroyo's peace initiatives, saying the resumption of peace talks with the Moro Islamic Liberation Front (MILF) "heralds a new hope for peace and development" for the Muslim community in Mindanao. "In case you need help, the OIC will stand by your government," he told Arroyo.

Arroyo said a new law allowing a second referendum on membership to the Autonomous Region for Muslim Mindanao (ARMM) will take effect tomorrow. A plebiscite will be held between May 3 and June 29, the election of new ARMM officials on September 10, and elected officials will start their term on September 30.

These developments will assure the OIC that the Philippine government is implementing the 1996 peace settlement between the government and the Moro National Liberation Front (MNLF), said Arroyo.

"These events will complete the compliance of the government with the peace accord. We would like to request the OIC for full support of the new ARMM in terms of development assistance," Arroyo noted. The government has agreed to resume talks with the MILF in Malaysia, Indonesia, and the Philippines, with the help of the OIC.

"Perhaps, a shifting venue between the Philippines, Malaysia and Indonesia would symbolise the unity of Asean (Association of South-East Asian Nations) for peace and development," Arroyo said, explaining the new approach in the government-MILF talks.