Both foreign and local perpatrators must be ``severely punished'' as they cost the country millions of dollars, Susilo Bambang Yudhoyono said Monday during a visit to the Borneo island province of East Kalimantan.

``Anyone involved in illegal logging, anyone, must be severely punished,'' he said over a local radio station. ``Our environment is destroyed, our economy is suffering.''

Yudhoyono's pledge came less than a month after he set up a team to halt unauthorized felling in Papua province and hunt down illegal timber barons running sawmills across Indonesia.

The London-based Environmental Investigation Agency has said about 300,000 cubic meters of merbau wood are being smuggled out of Papua every month to feed China's timber-processing industry. The smuggling of merbau - a hardwood used mainly for flooring - is estimated to be worth US$1 billion (HK$7.8 billion) a year.

The agency said illegal logging in Papua involved military and civilian officials, Hong Kong dealers, Malaysian logging gangs, multinational firms and Singapore brokers.

Another warning on timber came Monday from the UN Food and Agriculture Organization.

The rebuilding in areas hit by the December 26 tsunami poses a threat to forests as the need for vast supplies of timber may cause over-exploitation of resources, the agency said. It called for an assessment of needs, saying that in many cases it might be possible to recycle wood.

But in the Philippines, President Gloria Arroyo Monday lifted a logging ban in some areas as families dependent on the industry are said to be suffering.