Shortly after Moro National Liberation Front leader Nur Misuari announced his candidacy for Governor of the Autonomous Region of Muslim Mindanao, a beaming President Fidel Ramos talked with TIME Hong Kong bureau chief Sandra Burton and reporter Nelly Sindayen at his office in Manila. Excerpts from the interview:

TIME: How did you begin the search for a solution to the Muslim problem?

Ramos: There was a furor here during the presidential election campaign in February 1991 when this presidential candidate Ramos disappeared for four days. For the first time, I am now free to tell you where I went. With [House Speaker] Joe DeVenecia and two others, I flew to Hong Kong and Zurich, where we hired a small plane to go to Libya. The idea was to get support for a doable peace process with the Moro National Liberation Front by first talking to [Libyan leader Muammar] Gaddafi. We were taken to Colonel Gaddafi's tent in the middle of the desert, where we sought his views on a peace process in which the Organization of Islamic Conference could play the very important role of trying to persuade the M.N.L.F. to adopt peace as a solution to the problem.

TIME: Why did the Libyans agree to cooperate with you?

Ramos: They don't relish being in isolation, where they have been all these years. It is not only difficult for them politically, socially and culturally to be treated as pariahs in the world community, but it has also had a serious economic impact on Libya.

TIME: What impact will Misuari's decision to run for office have on public opinion and investor confidence?

Ramos: This will remove the fears of many people, because by registering as a voter and becoming a candidate, Misuari swears to uphold the laws and the constitution. What can be more constitutional than an electoral process, and what can be more unconstitutional than bloody violence and civil war?

TIME: What about reports that Muslim terrorists are using Mindanao as a base?

Ramos: I think our fears should subside, because the M.N.L.F. will join the government itself in the promulgation of peace and order, and we will remove from the ranks of the potential terrorists those who are firmly under the control and influence of chairman Nur Misuari, which is the great majority of the people who have taken up arms against the government in the southern Philippines.

TIME: Isn't it possible that the threat of extremists could grow now that the M.N.L.F. has made peace with the government?

Ramos: You might now compare chairman Nur Misuari with P.L.O. Chairman Yasser Arafat in that he now dedicates himself to forging and achieving peace, [while] the extremists who do not accept the peace formula continue to pose threats.

TIME: Will you and Misuari go down in history as the leaders who finally solved the Muslim problem in the Philippines?

Ramos: No, it's not solved yet. The ultimate solution will be when Filipino Muslims, Christians and Manobos are all traveling to Hong Kong together because they can afford to.