MANILA, 1 July 2005 — One of President Gloria Macapagal Arroyo's Cabinet official quit and the financial markets fell yesterday as the embattled leader tried to win back popular support after owning up to impropriety in the 2004 election.
Agriculture Secretary Arthur Yap, a key aide to Arroyo who is facing unrelated allegations of tax evasion, said he was leaving the cabinet because he did not want add to Arroyo’s problems.
Yap insisted his resignation was not in response to mounting pressure on Arroyo and her allies to step down after allegations of fraud during last year’s presidential election.
Arroyo, whose popularity rating has plummeted over the past month, faces attempts to impeach her after Congress launched twin inquiries into the alleged vote fraud and payoffs allegedly made by illegal lottery operators to her husband, son and brother-in-law.
The Philippine peso and listed stocks extended their losses yesterday amid investor concern that the political controversy would leave Arroyo unable to govern just over a year into her six-year term.
The House is expected over the next week to assign a committee to investigate if there are sufficient grounds to vote on whether Arroyo betrayed public trust by phoning a supposedly independent election commissioner, one of several grounds for impeachment.
Congress yesterday voted to play the audio recordings purporting to show that Arroyo stole the May 2004 vote.
Members of the House of Representatives after a nine-hour debate approved a motion by opposition leader Francis Escudero to have the half-hour recordings, contained in compact discs, played during the public inquiry.
The president admitted on Monday to having improperly called the election official during the vote count.
Without confirming that the voice on the tape was hers, the US-educated economist admitted calling a poll official.
She apologized on television for a “lapse of judgment” but denied rigging the election, in which she beat the country’s most popular movie star Fernando Poe by just over a million votes.
Thousands of militant unionists and leftist students marched in key points yesterday around Manila to demand Arroyo’s ousting and police went on full alert.
Some 2,000 protesters marched in the Makati financial district, burning posters lampooning the president and chanting “Oust Arroyo!” and “Arroyo resign!” There was no violence.
Self-Exile
In a bid to take the heat away from the president, first gentleman Jose Miguel “Mike” Arroyo left for Hong Kong last night, a day after his wife announced his voluntary self-exile as she attempted to regain confidence in her government rocked by allegations of vote-rigging.
Mike Arroyo was accompanied on Philippine Airlines flight by his son Diosdado and his wife Ma. Victoria, and the couple’s daughter Eva Victoria. Only daughter Evangeline Lourdes saw them off.
Father and daughter tightly embraced each other, both appearing to hold back tears. They declined to talk to reporters. The first gentleman’s final destination could be the United States, said his lawyer.
Arroyo announced Monday her husband had volunteered to leave the country “to remove himself from any situation which will cast doubt on my presidency.” A lawyer, Jose Miguel Arroyo has been implicated in illegal gambling payoffs.
The first gentleman’s departure followed Arroyo’s confession hers was the voice in a wiretapped telephone conversation which the opposition said showed she attempted to rig the 2004 election.
The first couple’s son, Pampanga Representative Juan Miguel “Mikey” Arroyo, is also leaving the country next week, possibly to join his father in the United States, a Congress colleague said.
Press Secretary Ignacio Bunye said the first gentleman was not fleeing the country and would return if asked to answer allegations against him in connection with the “jueteng” scandal.
Victim of Political Storm
Meanwhile, the peso fell to 56.255 against the dollar, close to its record low of 56.45 while the Philippine Stock Exchange composite index shed 1.07 percent to 1,924.23.
“People are jittery because of the political situation,” said BPI Securities senior manager Roberto Cano. “Investors are liquidating and taking profits, because they know there are some problems ahead.”
The sagging fortunes of the peso and local stocks appear tied to the plummeting popularity rating of Arroyo amid allegations that she had rigged the 2004 presidential election and charges that her husband, son and brother-in-law had received payoffs from illegal gambling lords.
“We continue to see further tests towards the 56.30-56.75 levels in the coming days as the dark clouds on the horizon have turned into a political storm,” a currency dealer at local commercial bank said. The dollar’s general strength also added to the pressure on the peso.
Luz Lorenzo, an economist at stock brokerage ATR Kim Eng Securities, said the widow of actor Fernando Poe Jr., Arroyo’s main rival in the last presidential race, had raised political tensions.
But Lorenzo said the move by actress Susan Roces in joining calls for Arroyo’s resignation would not likely trigger a mass uprising.
“After the two people-power style ousters of presidents in two decades, we believe the average person is more demanding and more discerning of potential claimants to the office,” she said.
“This is not to say that we believe President Arroyo can safely hold on to her position. That will be determined by how she and her administration reacts to the continuing blows that will surely be thrown her way by an opposition that has now been emboldened by the appearance of a credible central figure,” she said.
“Quick dramatic reforms and calmness amid the political crisis are the demands of the time,” Lorenzo said.
Cora Guidote, Arroyo’s consultant for investor relations, said in a statement that the peso had become a “victim” of what she described as “political noise.”
“This will not help our economy and will only serve to increase the cost of imports, particularly crude oil, prices of which have reached unprecedented levels in the world market,” Guidote said.
She said a weak peso would further fuel inflation that had been averaging 8.4 percent this year, way above the government’s target of 5-6 percent.
Press Secretary Ignacio Bunye made the same pitch at his news briefing. “It is important that we remain sober at this time because any adverse action of the people could affect the stock market and the peso. If the peso will weaken, everything will be more expensive, such as our raw material requirements, specifically oil, and payments on our international obligations,” Bunye said.
In a speech in Iloilo City, Arroyo said the surge in world crude oil prices had dealt the economy a “very big shock.”
“Imagine the price of oil today at $61 per barrel, 18 months ago it was only $30 per barrel, and 36 months ago it was only $10 per barrel,” she said.
Albay Representative Jose Salceda, one of Arroyo’s economic advisers, said investors’ fears had also been stoked by the opposition move to ask the Supreme Court to stop the implementation of the expanded value-added tax.
“The business community and foreign investors are disturbed, if not dismayed, over the move as it sends a bad signal that the fiscal reform program can be reversed even with respect to those that have been legislated,” Salceda said in a statement.
E-VAT Trouble
Meanwhile, consumers braced for higher fuel prices, higher power rates, higher toll fees and higher prices of other goods that may result today as the 10-percent expanded value-added tax (e-VAT) takes effect.
With the e-VAT, the Department of Energy (DoE) estimates that prices of petroleum products will increase as follows: diesel by 55 centavos a liter, unleaded gasoline by P2.60 a liter, regular gasoline by P2.01 a liter, kerosene by 55 centavos a liter, bunker fuel by P1.22 a liter, and liquefied petroleum gas (LPG) by P29.87 per 11-kg cylinder.
In May, Manila Electric Co. (Meralco) placed the increase in power rates at 80.56 centavos per kilowatt-hour based on the April billing. This means a household consuming 200 kWh of electricity a month would pay P1,622.26 instead of P1,454.77.
However, power rates have significantly changed since April and computations on the effects of the e-VAT have yet to be finalized. The increase in Meralco rates is expected to be finalized on Monday. (Additional input from Inquirer News Service & Agencies)
