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Update No: 020 - (08/09/05)

Philippine President Gloria Macapagal Arroyo's summer of political discontent is almost over and while the threat of impeachment has been removed with the failure of the pro-impeachment congressmen to gather sufficient votes for their cause, closure to the controversy is still far away. The president has called for reconciliation. She is unlikely to get it. The country is left drifting without any moral compass.

Impeachment is dead in the water
The administration party closed ranks behind President Gloria Macapagal-Arroyo to block efforts by the opposition to unseat her through an impeachment process. When push came to shove congressional representatives in the lower house voted 158 - 51 with six abstentions, in support of the House Committee on Justice report which had earlier thrown out the petition to impeach President Arroyo. 
It was a hollow victory however, since the issues that led to the impeachment proceedings - the allegations of involvement of the First Family in bribery and corruption and tampering with the election counting are unlikely to go away. Indeed, all the indicators suggest that in her efforts to hold on to power, any pretence at good and principled government has been abandoned. No longer is the issue that of "reform, in order to survive and govern". Rather the new mantra is that of "political survival at all costs." It is hardly the stuff of a "win-win" game: in this case President Arroyo wins (at least in the short-term); the country as a whole loses. More on this in a moment.

Opposition finally unites
The fractious opposition has finally found a cause around which it can unite - at least for the time being: that of "seeking the truth behind the election result. The evidence of cheating is in plain view for those who care to see it: it is not only the evidence contained in the transcripts of her illegally wire-tapped phone conversations with one of her appointed electoral commissioners (who at the time of his appointment was known to be an "election fixer"), and which would be inadmissible in any court of law because they were obtained illegally, there is also the discrepancies between the NAMFREL (the citizens' poll watchdog that has been monitoring elections since 1986) Operation Quick Count (OQC) result and the official COMELEC (Commission on Elections) tally. The difference saw a discrepancy in favour of President Arroyo in Mindanao by 600,000 votes. 
By way of explanation, it should be pointed out that in the Philippines, elections are tallied manually rather than by computer (and therein lies another story). The results of elections at individual polling booths are tallied by the Comelec manually at the local level, then at the municipal level, then at the province level and finally at the national level. Namfrel by contrast bypassed the province level and tallied directly the local and municipal tallies. At that point the Namfrel counts and the Comelec counts were broadly in agreement and led to Namfrel stating that the elections were fair and honest. However, it took a month for the Comelec to send its provincial level tallies to Manila and by that time there were huge discrepancies in the tally results.
All of this would have come out had the pro-administration congressional representatives allowed the evidence to be presented officially to an impeachment proceeding. Remember, that just a month ago, President Arroyo claimed she wanted all of this dealt with in an impeachment case rather than have people take to the streets. This it seems was just a political ploy to gain time. 
Now the opposition parties are saying that they would keep up their campaign to have the president resign by taking their campaign to the courts and to the streets. No less than former President Corazon Aquino and actress Susan Roces, the widow of the late presidential candidate Fernando Poe Jr. (who many believe to have been the real winner), have marched in the streets to lure more congressmen into their side hours before the final voting began.
Mrs. Aquino, who broke ties with President Arroyo when the latter's alleged wiretapped conversation with an election official about rigging the 2004 presidential polls was made public, is now a leading member of the Bukluran para sa Katotohanan (Coalition for the Truth), an alliance of civil society and opposition political parties working for the impeachment of the president.

Business remains on the sidelines
Privately many in the business community sympathise with the opposition cause and believe that the president did win the 2004 election by cheating but they appear reluctant to call for the president's resignation. The fact of the matter is that the economy is still doing reasonably well at the moment and an economic expansion of around 4.8-5.0 percent is expected this year, and those key economic officials who resigned in early July and called for President Arroyo to step down have been replaced by people of equally high calibre.
Beyond that there is of course the fact that the president is "one of them." Personal relationships are extremely important in Filipino society and whereas former President Estrada identified with the masses (and they with him), President Arroyo is unashamedly elitist. "How can we reject our own kind?" is the standard riposte many make when asked why the double standard. Elitism is still a powerful force in this country, especially if you are not among those immediately affected.
But this may just be a temporary state of denial. There is no doubt that a foreboding sense of crisis is lingering over many who can see the wider fallout from current events. It is worth noting that issues of "national security" are being invoked with increasing frequency and that the president is equating her own personal survival with the national interest. 

So where is this all leading?
The outlook is troublesome. Good - or at least "improving" - governance is a thing of the past and the president is totally compromised. She may have won the battle, she is after all a superb tactician but the war has been lost. With the vote in Congress, the only legal avenue left to investigate allegations of electoral impropriety has been cut off. Whereas previously she was given the benefit of the doubt by many, now her mere actions confirm her guilt in the minds of all but her most rabid supporters. 
There are daily reports that the president has bought many of the anti-impeachment votes in congress by offering plum appointments to the relatives of congressmen and women. Many of these appointments have even been catalogued in the press. There are also reports that detained President Estrada withdrew his support for impeachment in return for his release from detention. Horse trading has reached giddy heights. Rule of law and due process have been discarded as inconveniences.
Recently, a judicious leak from Malacañang Palace revealed that the PAGCOR (the legal gambling oversight body that is directly under the Office of the President) had been using its "intelligence" (slush fund) to pay off the Catholic bishops. So much for separation of church from state. What is even worse is the claim by one archbishop that "issues of morality do not apply here." The good archbishop's argument was that since the church was using the money to help the poor, it could turn a blind eye to gambling in this instance. The church is part of the problem.
We are seeing a regime in total moral decline and Ms. Arroyo is guiding it down. There can be no pretence that her agenda is otherwise and there is no other credible explanation. Despite her regular appearance at prayer rallies and the like it is evident for any who care to look that she and her team are hell bent on destroying or, worse, ridiculing those who would uphold moral principles.
The real tragedy for the country is that there is nobody on the horizon who could replace her. Investors are wise to be cautious.

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