MANILA -- The Philippines on Thursday pledged to create a special court and law enforcement agency to combat rampant intellectual piracy and counterfeiting, the trade department said.

Manila is on the US Trade Representative's watch list of countries because of book piracy, Internet piracy, and the illegal video camera recording of films in theaters.

Washington also wants Manila to strengthen one of its regulatory agencies, the Optical Media Board.

Special courts to handle intellectual property cases would be created in Manila and possibly Cebu, the country's second city, Trade Secretary Peter Favila said in a statement. He gave no timetable.

"This is something that the different business chambers and IP (intellectual property) owners have been proposing, and we know the Supreme Court appreciates the importance of IP in our socio-economic development," Favila said.

A research and training institute would be set up, he added, while the customs bureau, police, optical media board and justice and interior departments would be required to form permanent units to enforce the IP Code.

"An executive order is being prepared for this purpose," to be signed by President Gloria Macapagal-Arroyo, Favila said.

"A strong intellectual property system promotes innovation and competitiveness, attracts foreign investments and generates employment," he added.