Arroyo aims at strong economy, security as legacy
Arroyo aims at strong economy, security as legacy
John O'Callaghan, Reuters, Manila
President Gloria Macapagal Arroyo said on Wednesday she wants to make her mark in the twilight of her term by handing her successor a stronger economy with less graft and a country safer from terror.
Arroyo has vowed not to run for re-election in May 2004 to devote her attention to the woes of a nation plagued by budget deficit blow-outs, pervasive corruption, widespread poverty and decades of rebel violence.
"We must strengthen our institutions, we must strengthen our bureaucracy and we must work towards freeing the policy-making from the control of vested interests," she told Reuters in a wide-ranging interview at the presidential palace.
Arroyo was catapulted into the top job in January 2001 from her previous position as vice-president by a popular uprising that ousted her predecessor Joseph Estrada, who is now on trial on economic plunder charges.
Despite making what she calls "the ultimate sacrifice" by not seeking a new term, there is considerable doubt Arroyo will be able to make significant changes in a country where the rich wield enormous political power.
But the economist and daughter of a former Philippine leader said the key was to enshrine in law her anti-corruption and anti- poverty measures and endorse a like-minded successor.
"When reforms are legislated then they are, in effect, irreversible for a very long time," she said.
One of Arroyo's major battles has been trying to get legislators to back a stronger law against money-laundering to satisfy the Paris-based Financial Action Task Force (FATF).
The country faces the threat of sanctions that would slow trade and the flow of billions of dollars sent home each year by Filipinos working overseas if it does not meet the requirements of the global watchdog by March 15.
Arroyo said senators opposed to some of the amendments would meet FATF officials in Manila shortly to discuss their concerns.
"Even the bill as it stands now has strengthened the hand of the Philippine government against money-laundering," she said. "Maybe it's slower than if there were no vested interests but we have to keep moving forward."
Financial sanctions would be devastating for the Philippines as investors already are wary about the government's ability to control spending, collect enough tax and keep the peace.
After failing to meet its budget deficit target three times in 2002, Manila has said it needs to raise more than 198 billion pesos ($3.68 billion) this year to finance a projected budget shortfall of around 202 billion pesos.
"Our deficit so far this year is below the projected deficit," Arroyo said without providing figures.
"We've modernized our way of tracking tax evasion and also we are strengthening the fight against graft and corruption plaguing the Bureau of Internal Revenue and the Bureau of Customs."
The Philippines could afford to suspend auctions of Treasury bonds and bills due to demands for higher yields because of its fiscal discipline and improved tax collection, she said.
"We still have weapons in our arsenal to be able to close that gap outside of borrowing from the bond market," Arroyo said. She declined to elaborate.
The Philippine economy expanded at a decent clip of 4.6 percent last year but the benefits of that growth have been slow to trickle down to the third of the country's 80 million people who live on a couple of U.S. dollars a day.
Alleviating poverty and improving infrastructure are key parts of Arroyo's development program but she has been hamstrung by having to spread limited amounts of money across many areas. Poverty, particularly in the Muslim south of the largely Roman Catholic country, has played a major role in fomenting violence by militant Islamic and communist groups.
Bombings by the rebels and battles with troops have killed at least 200,000 people, mostly civilians, in the last 30 years. While Arroyo said she did not subscribe to recent warnings by senior officials that the Philippines would be hit by sympathy attacks if the United States led a war against Iraq, she stressed that militants could strike at any time.
"The most important thing is to be a hard target," she said. "I'm clamping down on rebels in the Philippines not because of any pressure from Washington -- it's because it's in our national interest. We want to have peace and order."
Arroyo said it was perfectly possible to wage war while negotiating an end to the rebel insurgency.
"There's no contradiction. We must show that, for those who don't want peace, the military is capable of doing its job," she said. "For those who want peace, we are willing to talk peace."
Arroyo did not reveal whether 2004 would mark the end of her political career but said her goal was "to work out the reforms that I have started and to increase the consciousness of the people of the need for those reforms".
"I would like to continue strengthening the economy to create jobs, to promote investment in an atmosphere that is, as much as possible, free of corruption and red tape," she said.