The federal government is moving to formally list Islamic State in East Asia as a terrorist organisation amid growing threats to Australia and the region.
Attorney-General George Brandis on Wednesday signed a recommendation to add it to the existing list of 23 groups under Australian criminal law.
Doing so would make it an offence to be a member of or to associate with the organisation, among other things, attracting a jail term of up to 25 years.
IS East Asia publicly declared its allegiance to IS in December 2015 and has been responsible for numerous terrorist attacks in the Philippines.
Its primary objective is to establish an Islamic state under Sharia law in the country.
Senator Brandis said IS was using the conflict in Mindanao as a "call to arms", with foreign fighters believed to be actively fighting against Philippine security forces in the island's city of Marawi.
"Only last week, ISIL released a propaganda video of Australian-accented extremist Abu Adam Al-Australi urging fighters to go to join the conflict in Mindanao," he told parliament.
Australian agencies estimate more than 750 south-east Asians are engaged with terrorist groups in Syria and Iraq, including about 110 Australians.
While only a "very small number" of Australian foreign fighters are expected to try return home, far more are tipped to come back to the wider region, he said.
The head of the domestic intelligence agency ASIO, Duncan Lewis, has said one of the greatest terrorist threats to Australians is in south-east Asia.