Philippines president to bow out

" All I ask is we should be united "
President Arroyo

In her surprise announcement, she said that she was stepping aside because of the high level of political infighting in the country.

She said she would spend the rest of her term in office trying to strengthen the economy and create new jobs.

Ms Arroyo, 55, came to power in January 2001, when she took over from Joseph Estrada, who was ousted following corruption allegations.

Mr Estrada is now facing charges of illegally amassing wealth during his period in office.

United call

BBC South East Asia correspondent Jonathan Head says that after less than two years in the job, President Arroyo appears to have lost heart.

As a US-trained economist, there were high hopes she could restore financial confidence and good governance.

However, our correspondent adds, her sometimes cold and businesslike manner and her elite upbringing made it difficult for her to win the support of the poor who make up most of the population.

Her administration has also been criticised for running up a large budget deficit and for allowing violent crimes like bombings and kidnappings to rise sharply.

The president denied that she was pulling out of the 2004 race because of falling popularity.

A November opinion poll showed that her approval rating had fallen to 45% from 54% in July.

She said that her main interest was national unity.

"My reading of the political winds tells me that the 2004 elections may well go down in history as among our most bitterly contested elections ever," Ms Arroyo told an audience in Baguio, a city in the north of the country.

"This is because of the deep social and political divisions that we now have.

"All I ask is we should be united."

'Relief'

Polls show that Filipinos are most concerned about rising prices, corruption and law and order.

Ms Arroyo said she would work to promote economic activity "unhampered by corruption and red tape in government" during her remaining 18 months in office.

Ms Arroyo had served as vice-president under Joseph Estrada, until he was ousted in a popular rebellion supported by the army and the Catholic Church.

President Arroyo said that now she had decided not to seek re-election, she felt "relieved of the burden of politics".