The memorandum of intent was signed when Philippine President Gloria Arroyo met with Spanish Prime Minister Jose Luis Rodriguez Zapatero and other Spanish leaders, a presidential statement said in Manila.

Philippine Defence Secretary Avelino Cruz was quoted as saying that the two countries had to improve their defence ties that are presently limited to logistics cooperation and the exchange of information.

He called for greater dialogue and for the setting up of a joint team to study cooperation in other areas such as education, counter-terrorism, fighting transnational crime, and maritime security.

"We need to have a strong ally here in the European Union. For them, they need to have an ally in Asean (the Association of Southeast Asian Nations) and we are their most logical ally," he said.

The Philippines, a former Spanish colony with a largely Roman Catholic populace, is a mainstay of Asean, which also includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam.

The Philippines is seeking to upgrade its poorly-equipped military, which is battling both a nationwide communist insurgency and Muslim extremists in the south linked to the al-Qaeda and Jemaah Islamiyah terror networks.