MANILA, THE PHILIPPINES - The local unit of US computer giant IBM has filed a libel suit against a Philippine government agency after being accused of selling it faulty software, court records showed Friday.

IBM Philippines filed against the Government Service Insurance System (GSIS) after an advertising campaign in which it claimed the US giant had sold it faulty software.

IBM Philippines said the GSIS ads in local newspapers "were not only false and misleading, but were motivated by ill will and malice."

The computer firm is demanding 205 million pesos (4.33 million dollars) in damages and legal expenses.

IBM said GSIS had acquired the faulty software from a local joint venture of three local firms that IBM Philippines was not a party to.

"IBM was not involved in the design, supply, installation and maintenance," of the systems, it said in a statement.

GSIS filed a civil suit against IBM Philippines on Wednesday and its US parent over the alleged failure of its software system, demanding more than 100 million pesos in damages and litigation expenses.

GSIS officials also said they had filed suits against the president of Questonix Corp., the firm contracted to install the IBM database management software.