Officials said the measure was taken in response to last weeks attacks in Saudi Arabia and Morocco amid reports that terrorists were planning new attacks.
The move came as Homeland Security Secretary Tom Ridge told US lawmakers of substantial progress in protecting the US against terror attacks.
"The United States intelligence community believe that terrorists continue to plan attacks against targets in the United States," Ridges deputy, Asa Hutchinson, said.
The heightened security comes for the fourth time since the new color-coded alert system was launched in March 2002 in the wake of deadly Sept. 11, 2001, terrorist attacks in the United States.
Still, Ridge said US security against terror attacks is much improved since his department came into existence a few months ago.
"We are much safer," Ridge told members of the House Select Committee on Homeland Security.
"We go to a new level of readiness every day. That is not to say... that we still dont have a considerable distance to travel," he said.
Ridges upbeat assessment came just hours, however, before the color-coded US domestic security alert was raised from yellow to orange as concerns grew about a possible terror strike on US soil.
The Federal Bureau of Investigation (FBI), in an advisory to state and local law enforcement agencies, said the al-Qaeda terrorist organization remains active and could hit the US and western targets overseas, as well as those on American soil.
The bombings of a residential compound housing westerners in Riyadh, Saudi Arabia show that the al-Qaeda "remains active and highly capable," the FBI bulletin said. The US has concluded the al-Qaeda was responsible for the Saudi attack.
The US intelligence community "assesses that attacks against the US and western targets overseas are likely; attacks in the United States cannot be ruled out," said the FBI bulletin, which was described to The Associated Press by federal law enforcement officials on condition of anonymity.
The rise in the terror alert level was foreshadowed Monday when US President George W. Bush warned that "the attacks in Saudi Arabia mean that weve got to be alert here at home, that weve got to be diligent, that weve got to understand that theres an al-Qaeda group still actively plotting to kill."
President Arroyo, who is in New York, said she remains unperturbed by the heightened security alert, even as extra-tight security was provided to her and her official delegation as she winds down her three-day state visit.
Speaking at the Park Hyatt Hotel before the US-ASEAN (Association of Southeast Asian Nations) Business Council, Mrs. Arroyo reaffirmed the Philippines support of the US government and the American people in their fight against terrorism.
"A world in constant threat of terrorism is a world of instability and unpredictability. We never know with specific certainty when and where the next terrorist strike will take place, but we cannot surrender our world to fear," she said.
She thanked Bush and the American people and said the Philippines and the US "shall work side by side" to "overcome terrorism that knows no boundaries and transform fear into peace, progress and prosperity in the world."
She also said, "we must find a way to support continued engagement of ASEAN with the US at a time when there are forces working against the relationship and when there are those with an evil agenda to disrupt it." The Philippines is part of the ten-member ASEAN, which earlier supported the call for a regional anti-terrorism coalition.
"We have an open, diverse and welcoming country, weve got 7,500 miles of land borders, and weve got 95,000 miles of navigable waters and sea shores," he said.
"We do have a lot of challenge ahead of us, but I think the men and women of the department are up to it."
Some of the most troubling deficiencies remain in the area of civil aviation, Ridge acknowledged the same area of vulnerability that allowed the Sept. 11 attacks by the Islamist militant group al-Qaeda.
Ridge said that the handling of air cargo which in many instances is loaded onto commercial passenger aircraft virtually unscreened is the next major priority in improving US air safety.
"We focused on the baggage, we focused on the passengers, and now were beginning to focus on the cargo," he said.
He also said many frontline airport security staff would be required to submit to new background checks, following recent reports that more than 24 screeners at the Los Angeles International Airport and another 50 at New Yorks John F. Kennedy Airport were found to have criminal records.
Still, in terms of preventing attack and responding to a potential terrorist assault, Ridge said there has been vastly improved cooperation and information sharing between the Central Intelligence Agency, the Federal Bureau of Investigation and other US agencies.
"Theres certainly more to be done, but I think within the first 90 days there has been considerable improvement," Ridge said.
Members of Congress were divided over whether there has been a measurable increase in domestic security. Sherwood Boehlert, a Republican from New York, cited numerous improvements in US security over the past several months.
"Were better focused, were better prepared, and were getting better focused and better prepared each day," he said.
The leader of the opposition Democrats in the US Senate, however, was less sanguine.
Among Democrats, he said "there is a belief that we can do better a belief that we can do more to protect our ports, our infrastructure, that we can do more to ensure that our first responders have the training and the resources they need to be as effective," Senate Minority Leader Tom Daschle said.
His Democratic colleague, California Rep. Loretta Sanchez, insisted the security enhancements have been illusory.
"Are Americans safer? Not much, in my opinion," she said. AFP, AP, Marichu Villanueva, via PLDT