Arroyo gets crucial support, consolidates grip on power

Arroyo gets crucial support, consolidates grip on power

MANILA (Reuters): New Philippine President Gloria Macapagal
Arroyo consolidated her grip on power on Wednesday when a
coalition of parties backing her wrested control of the House of
Representatives from deposed leader Joseph Estrada's supporters.

Barely five days in office and grappling with a depleted
treasury and volatile markets, Arroyo also won pledges of support
from the United States and international financial institutions.

In a late night session, a pro-Arroyo coalition won control of
the Lower House by electing minority leader Feliciano Belmonte,
an Arroyo supporter, as new Speaker.

The House was previously controlled by parties supporting
Estrada, who was ousted in a popular uprising on Saturday.

The legacy Estrada left behind is a ballooning budget deficit,
a flight of foreign investment and a host of other economic
headaches.

A call from Senate President Aquilino Pimentel for Estrada to
be exiled to save the country from any "violent upheaval"
underlined lingering concern about threats to the stability of
the fledgling government.

Pimentel said he was not insinuating that Estrada would try to
destabilize the new administration "but people who are his
partisans could easily make him the rallying point".

"All I am saying is that if Mr Estrada is exiled into another
country, he would be less of a problem to the nation," Pimentel
told reporters, adding it was up to Estrada to decide which
country he would like to go to.

Marine General Edgardo Espinosa voiced concern at the presence
of supposed Estrada "loyalists" in the military and police
forces.

"They're still capable. Estrada's men are still in place,"
Espinosa said.

Defense Secretary Orlando Mercado, who bolted to the Arroyo
camp last weekend, said on Tuesday he saw no threat of a coup
against Arroyo but the military was not taking things for granted
and was checking all such reports.

Central bank governor Rafael Buenaventura denied newspaper
reports Estrada had left behind a bankrupt government and that
state coffers were empty.

Buenaventura told Reuters the government had 130 billion pesos
(about US$2.7 billion) in the treasury.

But the government posted a budget deficit of 136.11 billion
pesos last year, more than double the original target. The new
government has forecast a budget deficit of 120 billion pesos for
2001.

New Finance Secretary Alberto Romulo said that in addition
there were "payables" of about 70 billion pesos pending.

"Obviously if you add the list of payables that have not been
paid, that would have been a bigger budget deficit," he said.

As Arroyo began grappling with the economic mess left by
Estrada, U.S. President George W. Bush telephoned her and said:
"If I can assist you in any way, I would like to."

Arroyo also got a boost from leaders of the International
Monetary Fund and the World Bank.

IMF Managing Director Horst Koehler said the Fund was
encouraged by her first policy pronouncements and said the
peaceful transition in the Philippines "offers much hope".

World Bank President James Wolfensohn backed Arroyo's promise
to fight poverty and restore good government and pledged the
bank's "continued support and cooperation."

After days of seclusion, the Estrada family broke its silence
to deny the deposed president planned to leave the country.

"We have no intention to leave," Estrada's son, Jinggoy, told
reporters. He denounced as "harassment" a government order on
Tuesday freezing Estrada's bank accounts.

The government has ordered Estrada not to leave the country
and to answer allegations of corruption and illegal acquisition
of wealth. The Ombudsman has accused Estrada of economic plunder,
an offense punishable by death.

Justice Secretary Hernando Perez dealt Estrada another blow by
rejecting any further claims he might have on the presidency.

Perez said Estrada's decision to leave the presidential
palace, coupled with Arroyo's oath-taking and the recognition she
received from the diplomatic community, "foreclosed all questions
regarding the legality and constitutionality of her assumption of
the presidency".

Estrada has told Congress Arroyo was only an "acting
president", suggesting he might try to re-take power.

Philippine markets have retreated from the highs reached just
after Estrada's downfall as the reality of the task facing Arroyo
sunk in, but they are still up on last week's closes.

Shares closed up 0.19 percent on Wednesday, having at one
stage been up almost two percent. The peso, which crumbled to
record lows at the height of the political crisis, firmed to
around 48.50 to the dollar on Wednesday.