Arroyo offers reward, talks tough on hostages

Police guard tourists at the Dos Palmos resort in Palawan province

By staff and wire reports

PUERTO PRINCESA, Philippines -- The Philippines has offered a 100-million-pesos ($2-million) reward for information leading to the capture of Muslim rebels who kidnapped 20 people from a tourist resort.

President Gloria Macapagal Arroyo said Monday evening she would not give in to any ransom demands and instead offered the rewards for the capture of rebel leaders.

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"I am ready to do everything to crush the bandits, to allow the hostages to safely return to their families and to bring back peace," Arroyo said on national television.

"To the bandits ... listen closely. I will finish what you have started -- force against force, weapons against weapons. They will only stop hunting you when you're all wiped out or all of you surrender," she said.

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Presidential spokesman Roberto Tiglao said the reward would include five million pesos for information leading to the capture of each of the leaders of the Muslim extremist Abu Sayyaf force involved in the kidnapping on Sunday of a group of tourists and locals from a resort in the southern Philippines.

Asked what was meant by meeting "force with force," Tiglao said: "Military operations."

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The Abu Sayyaf, one of two groups fighting for an Islamic state in the south of the mainly Catholic country, Monday claimed responsibility for the kidnappings.

Abu Sabaya, a leader of the extremist Abu Sayyaf group, said in a radio interview that the group was holding its captives on two islands in southern Philippines.

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"We have up to three Americans," Sabaya said. "If you want to negotiate, it's up to you, we're not pushing for it."

One of the Americans taken hostage delivered a statement over the radio.

"Hi, I am Mr. Martin Burnham, a U.S. citizen. I am a missionary. I am with my wife, we are in the custody of the Abu Sayyaf under Khadafi Janjalani," he said.

Jalanjani heads one of the group's factions which also held American Jeffrey Schilling for eight months until he was freed in April.

Philippine Tourism Secretary Richard Gordon told CNN however that officials were still investigating claims that the Abu Sayyaf were behind the weekend abductions.

'All-out war'

President Gloria Macapagal-Arroyo had declared an "all-out-war" against the Abu Sayyaf, and ruled out negotiations with the group regarded by officials as an outlaw organization.

But military officials say the Abu Sayyaf has regrouped in the last two weeks.

Troops killed several Abu Sayyaf members last month as Arroyo ordered a raid on the rebels

The latest saga began after about two dozen armed men wearing ski masks arrived in an outrigger canoe at the Dos Palmas resort in Palawan's Honda Bay at dawn.

The guests taken hostage are believed to include 13 Chinese Filipinos, three Americans, one Spaniard and at least one child. Two security men and a kitchen worker were also snatched.

Staff and guests at other resorts in the area have been put on alert.

Shortly after news of the kidnapping broke the U.S. State Department issued a statement urging American citizens in the Philippines to be very careful and avoid travel to certain islands.

"A series of security-related incidents has made travel unsafe in certain areas of the Philippines," the statement said.

Setback for the Philippines

The kidnapping is a further blow for the country, which has been gripped by political uncertainty.

Filipinos are still waiting for the results of local and congressional elections held on May 14, in polls slammed by the media as the most bloody in a decade and a half.

And earlier this month, violent riots gripped the capital, Manila, as supporters of former President Joseph Estrada tried to storm the Presidential Palace.

"This is bad for tourism, and will probably delay the coming in of some investments," former Philippine president Fidel V. Ramos admitted during an interview with CNN.

But the tourism secretary called on visitors not to turn their backs on the country yet, saying the regions of Luzon and Visays were trouble free.

Ramos also held out the hope that the country's offshore investors won't abandon plans of investing in the country.

"Investments coming in are on the basis of long-term perspective of the foreign community about the Philippines, and our best assets are our talented work force," Ramos said.

"(They are) English-speaking, are IT oriented and generally very flexible and available for jobs anywhere around the world," he said.