Ermita, who has been President Gloria Arroyo's special adviser on the peace process, was named defense secretary on Tuesday, replacing Angelo Reyes who resigned after a short-lived military mutiny on July 27.

Asked if he would continue as peace negotiator, Ermita told television station ABS-CBN "definitely."

"The purpose of the peace process is not totally incompatible with the objectives of the defense department. One complements the other," he said.

Ermita, a former general, said negotiations did not mean "having an agreement at all costs."

He said he would "rationalize the needs of the department and the needs of national security and rationalize the activities in the peace process."

Ermita was active in helping revive talks between Manila and the Moro Islamic Liberation Front (MILF) which has been fighting for almost three decades to set up an Islamic state in the southern third of this largely Christian nation.

MILF spokesman Eid Kabalu welcomed Ermita's appointment, saying "we look forward for a fruitful negotiations with the Philippine government."

"Being a man actively involved in the peace process, we expect Defense Secretary Eduardo Ermita to pursue vigorously the peace talks with the MILF," Kabalu said, adding Ermita was aware of conditions in the strife-torn south.

Ermita said he would push reforms in the military.

He stressed that Arroyo had been cleaning up the military procurement process and bringing more resources to the soldiers in the field long before the July 27 mutiny by some 300 soldiers who cited alleged corruption in the military and neglect of soldiers in combat.

The mutineers had demanded the resignation of Arroyo and then-defense secretary Reyes but their uprising collapsed in less than a day and they are now in detention.

Reyes had resigned last month, saying he wanted to end the restiveness in the military. Arroyo had served as concurrent defense secretary in the interim until Ermita was appointed.

Ermita said: "I am very confident that as far as the (armed forces) is concerned, all we need are a little more resources for them to be able to look after the welfare of the men and improve the operational capability of our men in the field."

He said he expected to see closer coordination with the defense department of the United States, the Philippines main ally.

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