Mr Reyes warned of attempts to destabilise Ms Arroyo's government
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Philippine Defence Secretary Angelo Reyes has resigned, warning of what he calls a well-organised effort by certain forces to bring down the country's democracy.
Mr Reyes' resignation makes him the second senior government casualty since hundreds of renegade soldiers held a mutiny in Manila last month.
Mr Reyes said he hoped his decision would give President Gloria Arroyo a "free hand" to deal with what he described as the continuing threats to de-stabilise her government.
Ms Arroyo will now take up the defence portfolio herself, her spokesman Ignacio Bunye said.
During the 27 July mutiny, more than 300 soldiers took over part of Manila's financial district for 20 hours.
The mutineers called for the resignation of Mr Reyes, as well as Mrs Arroyo and military intelligence chief Victor Corpus, alleging endemic military corruption.
Mr Corpus left his post shortly after the uprising, although the government denied that his departure was connected to the incident.
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Unless a drastic remedy is quickly found, these elements
- I am convinced - are going to be the nation's undoing
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Mr Reyes was accused of corruption, including the selling of arms to Muslim rebels.
The mutineers also alleged that he was involved in a deadly bomb attack in the southern Philippines early this year, in a bid to win more anti-terrorism funding from the United States.
In his resignation speech, Mr Reyes denied all the accusations against him, describing them as "baseless", and said that the reason he had decided to quit was because of the continuing threats against Mrs Arroyo's government.
"At this time, there exists a well-organised and well-funded effort by certain forces to bring down our democracy through massive political disinformation and agitation," Mr Reyes said
"Unless a drastic remedy is quickly found, these elements
- I am convinced - are going to be the nation's undoing," he warned.
Analysts are divided in their views on Mr Reyes' surprise departure.
Some say he is falling on his sword in order to appease any other potential coup plotters.
"It could be viewed as taking the wind out of the opposition's sails," JV Rufino, from the Philippines Daily Enquirer, told the BBC's East Asia Today programme.
But others said the resignation of Mr Reyes, who was instrumental in Mrs Arroyo's rise to power, could weaken the president further.
Mrs Arroyo herself has recently accused "disgruntled and disenfranchised politicians" of trying to destabilise her government.
A campaign accusing her husband Michael of corruption has added to her concerns.
Mrs Arroyo's anxiety is not unfounded, correspondents say. In 2001 her predecessor Joseph Estrada was deposed following a military-backed coup.
In a sign that she is taking the threats seriously, Mrs Arroyo has tightened the security around the Edsa shrine in central Manila, the focus of the 2001 revolt.