Australia and Southeast Asia have joined forces to choke financing for militant networks, Canberra said Wednesday, amid concerns about the Islamic State group gaining a foothold in the region.
IS militants seized the southern Philippine city of Marawi in May, a move Philippine officials and analysts say was part of the group's plan to establish a base in the region.
Dozens of Australians were also killed in a militant attack on the Indonesian resort island of Bali in 2002, one of the worst such attacks in the region.
The alliance aims to disrupt the funding of militant groups through enhanced financial intelligence sharing, Australian Justice Minister Michael Keenan said Wednesday at a counter-terrorism conference in Kuala Lumpur.
"The stability and security of Southeast Asia is of critical importance to Australia," said Keenan, who also assists Australian Prime Minister Malcom Turnbull on counter-terrorism issues.
Canberra "is committed to defeating the threat posed by terrorist groups, including ISIL, in the region," he added, referring to IS by another name.
Under the initiative, participating states will "directly target and disrupt the funding lifeline of terrorist groups" by denying them access to the international financial system and other sources of funding, Keenan said.
Australia's financial intelligence agency AUSTRAC and the Philippines' Anti-Money Laundering Council will lead the group.
The alliance -- named the South East Asia Counter Terrorism Financing Working Group -- is the latest effort to enhance regional cooperation against militants.
Earlier this year, Australia sent two Orion aircraft to provide surveillance support to Philippine troops in their bloody five-month battle with militants in Marawi.
Australia has been sharing intelligence with some Southeast Asian countries for many years but those arrangements need to be institutionalised, Keenan told reporters on Wednesday.
"We all know that the key weapon that we have in this war against terrorism is information. And... we must find ways that it is shared seamlessly and shared in a timely way."
The head of the Malaysian police counter-terrorism division said Kuala Lumpur had arrested 20 suspected militants involved in terrorist financing activities this year.
"They're channeling money through Daesh members in Syria to Daesh members in Philippines," Ayub Khan Mydin Pitchay told reporters, using another name for IS.
"Some of them are businessmen. Some of them they sold their house, their property. They are involved in small businesses," he said, adding that they used legal banking channels to transfer the funds.
He added there was still no confirmation that Malaysia's Amin Baco, dubbed the new "emir" of IS in southeast Asia, was among those killed in Marawi.
Amin, involved in militant activities in the region since 2001, was supposed to have replaced Filipino militant Isnilon Hapilon, the leader of the Marawi seige who has been confirmed killed by Philippine troops.
"Amin Baco, he is an experienced chap... he's one of the bomb experts. The most important thing is he is married to one of the daughters of Isnilon Hapilon," Ayub Khan added.