Aquilino Pimentel Jr, an opposition senator, said the "amendments have effectively defanged the original version" of the anti-terrorism bill, renamed the Human Security Act.
The bill provides for the creation of an anti-terrorism council and the banning of "terrorist" groups, he said.
The legislation must be merged with a version passed last year by the House of Representatives before Arroyo can sign it into law.
The safeguards include a limit of three days of detention without trial of suspected terrorists, down from the 30 days sought by police, and more than $10,000 in compensation for wrongful detention.
Journalists, lawyers and doctors may not be compelled to disclose details about suspects under the bill, said Pimentel.
The law may not be enforced a month before or two months after any elections to prevent political rivals from being harassed.
The bill also provides for a maximum term of 40 years in jail.
Critics continue to oppose the bill.
The Defence of Liberties, a lawyers group, called it "nothing more than a weapon that will be used against legitimate dissenters and further intensify human rights violations in the country".
Bayan, an umbrella organisation for human rights groups in the Philippines, urged the people to oppose the bill.
Renato M Reyes Jr said the biggest "terrorist" threat was the government itself.
"State terror is our main problem. We fear that the [bill] will increase the powers of the state and thereby perpetuate human rights violations."