Vice-president resignation, peso's fall a blow to Estrada

Vice-president resignation, peso's fall a blow to Estrada

MANILA (Reuters): Philippine President Joseph Estrada, accused
of links to gambling lords, faced the biggest crisis of his two-
year rule on Wednesday when his vice-president quit the cabinet
and the peso crashed to a new low.

As presidential spokesmen dismissed rumors that more cabinet
resignations were in the wind, two members of Congress deserted
the ruling coalition in a sign that unity within the beleaguered
Estrada administration was cracking.

"We have become the laughing stock of the world," Senator
Ramon Magsaysay Jr said in announcing his decision to break away.

Archbishop of Manila Cardinal Jaime Sin and a council of 75
Roman Catholic priests triggered the crisis on Wednesday when
they urged Estrada to resign, saying "he has lost the moral
ascendancy to govern".

In a move that stunned the country's financial markets and
sent the peso on a drive through the 48-to-the-dollar level,
Vice-President Gloria Macapagal Arroyo on Thursday quit as Social
Welfare Secretary.

Not even Estrada's denial of receiving payoffs from gambling
syndicates in a televised address to the nation and his
appearance before a gathering of leading businessmen could calm
market nerves.

"He must go to restore confidence...only one thing can fix
this and that is his stepping down," a currency trader with a
local bank said.

But Estrada defiantly rejected calls to resign, saying the
campaign against him was part of a "politically motivated hatchet
job" by the opposition ahead of next year's congressional
elections.

"I have not received a single cent from...any form of illegal
gambling. My conscience is clear. I am not hiding anything from
our people," he said.

The Foreign Office said Estrada had canceled his scheduled
trip to South Korea to attend the Oct. 20-21 Asia-Europe Summit
meeting so he could attend to domestic problems.

"The president is in a difficult position," said Senate leader
Aquilino Pimentel, who is leading a congressional probe into the
accusations. "You know the saying -- rats desert a sinking ship."

Arroyo's announcement came a day before opposition legislators
were to file a formal resolution seeking to impeach Estrada, a
former movie actor whose 28-month presidency has been besieged by
one scandal after another.

The latest involves allegations raised last week by his former
political ally, Luis "Chavit" Singson, that he received 414
million pesos ($8.7 million) in payoffs from gambling lords
running an illegal numbers game called "jueteng".

Arroyo is the first cabinet member to resign since the scandal
broke.

"Much as I appreciate the chance that the president gave me to
serve the poor...I regret that I can no longer continue to serve
as a member of the present cabinet," said Arroyo in a statement
released by her office. She is now overseas.

A leader of the opposition, she enjoys massive nationwide
popularity and her presence in the cabinet had helped Estrada
maintain an image that his administration had the backing of some
of the opposition.

Within an hour of Arroyo announcing her resignation,
Magsaysay, chairman of various Senate committees, announced he
was quitting Estrada's party to become an independent.

Influential congressman Roilo Golez also resigned from the
coalition, saying "the allegations (against Estrada) are very
serious and affect the moral foundations of the presidency".

Estrada was speaking before 1,000 Philippine businessmen at a
Manila hotel when the resignations struck. He avoided reporters'
questions after his speech.

Almost all members of his cabinet joined him at the meeting to
show they were united behind Estrada.

"There is none among us, at least at this point, even
contemplating resignation," presidential spokesman Ricardo Puno
said. "It's not our philosophy to abandon an ally when he is in
trouble."

Philippine central bank governor Rafael Buenaventura also
scotched rumors that he and members of Estrada's economic team
were planning to abandon him.

Arroyo, who keeps her job as vice-president, is next in line
for president should Estrada resign or be forced to step down.

Analysts have said that with the ruling coalition holding the
majority in both chambers, it would be hard to get any
impeachment action which requires Lower House approval.