Members of the House of Representatives ratified the long-delayed Human Security Act late on Monday at a special two-day congressional session convened to pass crucial legislation.
Jose de Venecia, speaker of the House, said the ratification was "a major step to enhance the Philippines' capability to meet threats from regional and global terrorism and would greatly help the country's efforts to wage war against all forms of terrorism".
Gloria Macapagal Arroyo, the Philippine president, is expected to sign it into law soon.
An earlier draft bill passed last year failed to make it past the opposition-controlled Senate due to concerns that it could be used by the Arroyo government against her critics.
Although the latest version has safeguards against possible official abuses, human rights groups remain unconvinced and plan to appeal to the Supreme Court to block the measure as soon as it is signed into law.
"As soon as Mrs Arroyo signs the anti-terrorism act, we go to the Supreme Court," said Renato Reyes, secretary-general of the largest left-wing alliance, Bayan.
He said the definition of terrorism in the bill was "too broad and vague and may include even legitimate forms of dissent".
Earlier this week about 400 United States Marines arrived on Jolo for annual counterterrorism exercises with Philippine troops.
The operation includes building roads, schools and health clinics as part of a "hearts and minds" operation intended to win the support of the local Muslim population.