Philippine President Gloria Macapagal Arroyo expressed optimism Friday toward the conclusion of a free-trade agreement with Japan, as the Philippines has no intention of entering Japan's sensitive rice market.

On the sidelines of Japan-ASEAN summit that ended the same day, Japan and the Philippines agreed to begin government-level negotiations over a free-trade agreement, likely to begin January.

Speaking to a small group of reporters, Arroyo urged Japan to allow caregivers from the Philippines to work in Japan. Manila has a well-established reputation for its "excellent supply of caregivers," she said.

Health ministry officials are reluctant to lift the ban on such workers, claiming that could increase unemployment in Japan.

Arroyo said she welcomes access to Japan's abundant capital resources, which would create jobs in her country.

"We don't compete much with Japan because we have a different level of development," she said. "There are very few obstacles and (the FTA) should be good for both nations."

The president also urged Japan to open its market for tropical fruits, including bananas and pineapples, which do not compete with Japanese products.

Arroyo expressed her support for the creation of the East Asian Community, as long as it would not damage the "dynamics of ASEAN." She was apparently concerned over the possibility that the regional community may contradict with the Philippines' security alliance with the United States.

"I am always favorably disposed to an alliance that will aid economic growth and political stability," she said. "But it must be done within the dynamics of ASEAN."

Arroyo backed Prime Minister Junichiro Koizumi's decision to send the Self-Defense Forces elements to Iraq despite Japan's war-renouncing Constitution and its contentious interpretation of the military.

When "we fight against terrorism, which is transnational evil, we have to have a transnational effort," she said. "Only by going aggressively after terrorists can the world feel safe."

Arroyo also stressed the need for the United Nations to play a bigger role in the reconstruction of Iraq. The Philippines will make an effort to back the move when it becomes a rotating member of the U.N. Security Council in January, she said.