October 31, 2007	Wednesday	Shawwal 18, 1428

MANILA: As recently as a week ago, Philippine President Gloria Macapagal Arroyo was beset by mounting corruption scandals, cracks in the ruling coalition and calls for her impeachment.

A series of adroit moves later, she appears to have put the troubles well behind her.

Financial markets surged on Tuesday when they reopened after a long weekend, at least partly because investors applauded the lessening of risk, but many commentators called it a display of brazen political expediency.

“She’s playing some very clever games and succeeding at it,” said Peter Wallace of the Wallace Business Forum consultancy. “It’s not a good signal. But the reality is, she knows what she is doing. She’s going to win at the game she’s playing.”Perhaps the most important initiative by Arroyo was to mend fences with House of Representatives Speaker Jose de Venecia, who commands a significant portion of the ruling coalition and could have allowed an impeachment motion against her to succeed.Relations between the two plummeted after de Venecia’s son named both Arroyo and her husband in a senate inquiry into kickbacks in a $330 million government telecommunications contract but they now appear to have made up.

De Venecia told Reuters that he and Arroyo remained allied and that she should easily see out her term, which ends in 2010. “I have a great deal of respect for the president,” he said.

Then, on Thursday, Arroyo pardoned her predecessor Joseph Estrada, who was convicted six weeks ago of plunder and sentenced to life in prison. Despite a storm of criticism, Arroyo seemed to have bought over a man who has been a popular opposition figurehead.

“The pardoning of Estrada so quickly was unconscionable,” said Wallace. “It makes a mockery of the justice system.”

Other analysts agreed.

“It will give the left and the opposition more ammunition against her and more cause for cynicism,” said Tom Green, executive director of Pacific Strategic Assessments, a risk consultancy.

But he added: “She has been pretty adept at managing those, snuffing out people that oppose her and elevating people who are with her. She has turned into a pretty adept political infighter.”

MARKETS UP: Estrada has thanked Arroyo for his release and pointedly refused to join calls for her ouster, although she was the moving force behind his dismissal from the presidency in 2001.

Opposition leaders have expressed dismay, but the peso and the stock market strengthened when they opened on Tuesday.

Arroyo, a former economics professor, has been lauded for improving the country’s economic fundamentals and ushering in record growth in the first two quarters of this year.

“The economic data that have been coming out tends to point to the fact that government is at least doing something right,” said Oliver Plana, head of sales at Asiasec Equities Inc.

“That’s enough to make business content, because they are, after all, just looking for stability which at the moment is being provided.”

The military continues to be solidly behind Arroyo and while some in the powerful church have called for her resignation, others have stepped in to support her.

“She knows the levers of power are the military, the church and the business clubs,” said Benito Lim, a political science professor at the University of the Philippines. “She has divided them all.”

Critics have said Arroyo has done little to substantially answer the charges of corruption against her, beside blanket denials and ordering what are likely to be toothless inquiries.

Wallace, the business consultant, said the president appeared to have ensured she will remain in office until the end of her term, but he questioned her methods of getting support.

“It’s more the degradation of the system under her that upsets me rather than the political risk of her coming or going,” he said.

“The bottom line is the morality of society is not a concern to business. But the uncertainty that it generates can be.

“Much of the legislative reform will perhaps slow and a number of bureaucratic reforms that need to be done won’t perhaps be addressed as forthrightly as they could be. So those sort of things will have an impact on business.”—Reuters