The Vietnamese government earlier ordered the evacuation of more than 170,000 people as strong winds of up to 150km/h (93mph) and heavy rain began to affect the central coast.
Local media report that Ketsana, which has now strengthened into a typhoon, has caused flooding and power cuts. Vietnam Airlines has suspended all flights to the coastal cities of Danang and Hue.
Weather forecasters are predicting more heavy rain later this week, with a new storm forming in the Pacific likely to enter Philippine waters on Thursday, making landfall on the island of Luzon.
"Evacuees will be given shelter in available areas among the Malacanang [palace] buildings and in tents that will be put up in between the buildings," Philippines President Arroyo said in a statement announcing the opening of the palace compound.
She said that if required, palace employees would "yield their work stations to provide more space for our displaced countrymen", and that she had temporarily moved her office to another section of the compound along the Pasig river.
After word of the offer spread, hundreds of people converged on the palace and received plastic bags filled with noodles and canned sardines.
"We just heard it in the news that they are giving relief goods at the palace so we walked for one hour," street sweeper Rosette Serrano, 31, told the AFP news agency.
Ms Serrano lost everything except her clothes when her house was submerged on Saturday.
But officials said people would not be permitted to remain inside the presidential compound unless they were first checked by aid organisations.
"We cannot just allow every evacuee in because of logistical and security problems," Wilfredo Oca, an aid to Mrs Arroyo, told AFP.
The sharp rise in the death toll - up 100 from the previous figure - came after more than 90 deaths were recorded in Manila, the National Disaster Co-ordinating Council said in a statement.
The toll is expected to rise further as thick mud is cleared from the worst affected parts of the city. Troops, police and volunteers have so far rescued more than 12,000 people.
Defence Secretary Gilberto Teodoro said the situation could become worse if aid supplies ran out.
The scene in three of the worst hit areas
Earlier, Mr Teodoro appealed for humanitarian assistance from the international community.
"We are trying our level best to provide basic necessities, but the potential for a more serious situation is there," he said, in a nationally televised address.
"We cannot wait for that to happen."
AT THE SCENE
Alastair Leithead, BBC News, Manila
Half the covered basketball court in Bagong Silangan has been converted into a mortuary; the other half is sleeping space for some of the hundreds of people left homeless by the storm.
This little community in Quezon City was hit more badly than most by the flooding. Hundreds of homes by the river were swept away and those which were not destroyed have been swamped by mud.
Queues of people spent the day lining up waiting for what little aid there was available in this area to be handed out. In one centre small plastic bags containing just a few clothes were being given and at another, run by a church group, those identified as being most in need were given a few tins of food and bottles of water.
Correspondents say many people have been complaining that aid has been coming too slowly and is not sufficient.
President Arroyo said those who had suffered had a right to complain, but asked them to also consider the scale of the disaster.
"We're responding to the extent we can to this once-in-a-lifetime typhoon emergency," she said in a statement.
The UN's World Food Programme (WFP) is sending food supplies for 180,000 people to the Philippines.
WFP Executive Director Josette Sheeran said the organisation would support the Philippines to ensure a "swift and co-ordinated recovery effort".
Rescue workers are continuing to pull bodies from the mud and swollen rivers.
But the BBC's Alastair Leithead in Manila says the rescue operation is now focusing on getting supplies to those who have been displaced.
Ketsana, with winds of up to 100km/h (62mph), hit the Philippines early on Saturday, crossing the main northern Luzon island before heading out toward the South China Sea.
Over the weekend, the government declared a "state of calamity" in Manila and the 25 storm-hit provinces, including many that have not experienced widespread flooding before, allowing access to emergency funds.
Officials say more than 40cm (16in) of rain fell on Manila within 12 hours on Saturday, exceeding the 39cm average for the whole month of September.
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