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Last Updated: Thursday, 24 June, 2004, 00:23 GMT 01:23 UK
Reforms key to Arroyo's new term
By Sarah Toms
BBC, Manila

Gloria Arroyo, newly-elected President of the Philippines, faces a hard task fighting corruption and invigorating one of Asia's most sluggish economies.

Her new mandate should give Mrs Arroyo, a US-educated economist and daughter of a former president, more clout to push through much-needed reforms.

Gloria Arroyo (21/06/04)
Mrs Arroyo has won a new, six-year term
But a divisive campaign against a popular film star, and allegations of election fraud, point to problems ahead as Mrs Arroyo tries to deliver on promises of cleaner water, cheaper electricity, more schools and one million new jobs each year for the next six years.

Scott Harrison of risk consultancy Pacific Strategies & Assessments said the president would have little money to spare as long as debts pile up, corruption runs rampant and tax collection stays weak.

"She will have a tough challenge and will meet resistance to some of her economic policies as they will go against the grain of vested interests and monopolies," Mr Harrison told BBC News Online.

One of Mrs Arroyo most controversial proposals is to raise "sin taxes" on cigarettes and alcohol, to help strengthen budgets for education, healthcare, poverty reduction and infrastructure.

But one of her biggest battles will be getting many of the wealthiest families and powerful businesses to pay their share.

Arroyo won't be hamstrung by allegations of fraud as long as they are not substantiated
Jojo Gonzales, Philippine Equity Partners

She is also constrained because, after months of campaigning and weeks of waiting, many voters have become jaded about the conduct of their politicians.

"The presidential campaign, the election itself and the canvassing have been far from perfect," the Philippine Daily Inquirer newspaper said in an editorial.

"But the entire political system - no, our entire social, economic and political culture - suffers from many defects. This has to change if we are to accelerate our development."

Fraud claims

Mrs Arroyo first inherited the presidency from Joseph Estrada, who was chased from office in January 2001 by street protests fuelled by anger about corruption.

By winning this election, President Arroyo now has the mandate she lacked.

But millions of poor voters who supported her challenger, film action hero Fernando Poe Junior, still see her as a usurper.

Opposition allegations that the election was rigged carry the vague threat of unrest, especially given the country's history of two "people power" uprisings and at least nine coup attempts in the last 18 years.

But Jojo Gonzales of Philippine Equity Partners saw little chance of people spilling into the streets to protest fraud at the ballot box.

"In every presidential election there are claims of cheating. There's even a well-known Filipino saying - there are no losers, just the winners and those who got cheated out of office," Mr Gonzales said.

"Arroyo won't be hamstrung by allegations of fraud as long as they are not substantiated," he said.

Priorities ahead

In Manila's financial and diplomatic district, the gleaming skyscrapers and exclusive shops make it hard to believe the Philippines suffers some of the worst poverty and unemployment in Asia.

Police near Forbes Park district in Manila (21/06/04)
Security is tight following threats of unrest
Less than 10 minutes away, though, rickety shacks covered with corrugated iron roofs line a railway track. Such slums are not an uncommon sight in a country where one third of the 84m people survive on less than $1 a day.

Raising living standards, creating jobs and educating an English-speaking workforce are vital to improving the economy and keeping more Filipinos from leaving home for better opportunities abroad.

Rebel violence, threats from regional militants and a fast-growing population are other major areas for attention.

While investors sighed with relief after Mrs Arroyo beat Mr Poe, who had no political experience, many analysts saw her last three years in office as unremarkable.

Earl Parreno of the Institute of Political and Electoral Reforms said President Arroyo now had the chance to pass potentially unpopular but much-needed reforms because she no longer needs to worry about being re-elected.

"She is in the position to have that political will to ram all these policies and put in place a condition that would favour a better climate for investment and a peaceful environment for people," Mr Parreno said.

The BBC's Alix Kroeger
"Six weeks after a bitterly disputed vote... the Philippine President has been returned to power"

Profile: Gloria Arroyo
06 May 04  |  Asia-Pacific
Arroyo 'wins' presidential poll
05 Jun 04  |  Asia-Pacific
Philippines voters face stark choice
06 May 04  |  Asia-Pacific
Profile: Fernando Poe Junior
06 May 04  |  Asia-Pacific
Country profile: The Philippines
21 Dec 03  |  Country profiles

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