ARROYO STEADYING THE SHIP

C O N F I D E N T I A L SECTION 01 OF 03 MANILA 003046

SIPDIS

NOFORN

DEPT FOR EAP, EAP/PMBS, INR/EAP, EAP/PD, DS/ITA, DS/IP/EAP

E.O. 12958: DECL: 07/01/2015
TAGS: PGOV PINS PINR KPAO ASEC RP
SUBJECT: ARROYO STEADYING THE SHIP

REF: A. OPS CENTER - MANILA 07-01-05 TELECON


B. MANILA 2993

C. MANILA 2887

D. MANILA 2840

E. MANILA 2815

Classified By: Political Officer Andrew McClearn for
reasons 1.4 (b) and (d).


1. (C) Summary: The political scene in Manila continues to
be lively but not truly turbulent. During a day trip outside
of Manila, President Arroyo vowed to bring the country out of
"political and economic deterioration." According to her
son, the president's mood was good and she was confident of
weathering the storm. Former president Aquino urged
Filipinos to remain peaceful and loyal to the Constitution.
Hearings in the House and Senate over the tape and illegal
gambling scandals continue. The audiotapes may provide new
revelations not only about the President's conduct during the
May 2004 elections but also about alleged opposition
misdeeds. Although an impeachment motion is moving forward,
no official votes to refer it to the Senate could take place
until the next Congressional session begins on July 25; the
prospect of impeachment remains unlikely. The opposition
continues to hold anti-Arroyo rallies, but turnout remains
relatively small. Arroyo is under pressure, but seems to be
having some success in steadying the ship. End Summary.

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Arroyo Carries On
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2. (U) President Arroyo visited Iloilo City in the central
Philippines on June 30. She proclaimed that "I am committed
to moving this nation up from political and economic
deterioration to an age of change and renewal." The
president also expressed deep concern over the cost of oil
and its impact on the economy. The trip out of Manila was
the first that Arroyo has taken since she apologized to the
Filipino people in her June 27 address.


3. (C) On July 2, Charge will join President Arroyo at
Malacanang Palace to inaugurate the "Filipino People's
Initiatives Against Trafficking Road Show Campaign." USAID,
through its Rule of Law Effectiveness Project, will fund the
initial phase of this effort. The event was originally
slated to take place at a site in Samar Island in the central
Philippines, but, according to the Malacanang handler, the
President preferred to remain in Manila "for obvious reasons."

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Family Bravado
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4. (C) In a June 30 meeting with Acting Pol/C met,
presidential son and Congressman Juan Miguel "Mikey" Arroyo
said his mother was "tough," her mood was good, and she was
confident of weathering the storm. Mikey claimed that "once
the tensions subside, you will see that my mother has emerged
stronger than ever." Mikey described the opposition as
"destructive." Mikey insisted that he had no plans to resign
from office, nor did his uncle, Congressman Ignacio "Iggy"
Arroyo, although Mikey remains on an official "leave of
absence." Mikey plans to join his father on a trip to
California on or about July 5. (Comment: While Mikey's
words were cocky, his body language was clearly nervous. He
eschewed his usual expensive wardrobe and trademark
top-of-the-line Rolex for a distinctly inconspicuous look.
End comment)


5. (SBU) The First Gentleman departed for Hong Kong with his
other son and family and their nanny on June 30. However,
the Sandiganbayan court has summoned him to appear on July 4
for the trial of former president Joseph Estrada. According
to defense lawyer and former Senator Rene Saguisag, he plans
to prove that Mike Arroyo plotted to overthrow the Estrada
presidency together with his wife, who was then vice
president. It is not clear whether Mike intends to answer
the summons or ask for a postponement.

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Voices of calm
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6. (U) Former president Corazon Aquino publicly urged
Filipinos to remain peaceful and loyal to the Constitution.
In a June 30 televised press conference, Aquino said she had
visited Susan Roces, widow of former Arroyo foe Fernando Poe
Jr., on June 29 and made clear that Aquino would not support
any extralegal actions. Aquino encouraged the Filipino
public to find strength in prayer and said that "people power
has succeeded only if it is for others... and not personal
political gain." Aquino added "there is no need to step
outside the Constitution, since doing so would expose us to
greater danger than the injustice we want to correct."
Aquino plans to attend a prayer rally late July 1. (Charge
will meet with Aquino on July 7 for a private lunch.)


7. (C) According to Monsignor "Ding" Coronel, the General
Secretary of the Catholic Bishop's Conference of the

SIPDIS
Philippines (CBCP),Aquino remained very close to Manila
Archbishop Gaudencio Rosales, other members of the Catholic
hierarchy, and many rank-and-file priests and nuns. He
remarked that she had become much more active in politics of
late, including the June 26 joint call with Archbishop
Rosales on President Arroyo. Coronel commented that Aquino,
in meetings with Church leaders, had expressed interest in
the formation of a "truth commission" that would look into
the May 2004 election and ways to reform the electoral
system. Coronel added that the CBCP will issued statements
regarding the situation during its annual meeting in Manila,
which will be held July 4-11. The "Social Action" office of
the CBCP issued a statement on June 30 calling for "national
sobriety" and non-violence.

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Hearings Plod On
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8. (SBU) Hearings in the House and Senate over the tape and
jueteng scandals continue. The joint committee in the House
investigating President Arroyo's role in post-2004 election
improprieties listened to a shortened version of the tape on
June 30. House Minority Leader Francis Escudero won his
motion to replay a 32-minute version of the audiotape
allegedly containing snippets of conversations between
President Arroyo and then-Commission on Elections (COMELEC)
official Virgilio Garcillano. Pro-Arroyo representatives had
argued in favor of playing the full three hour-long
audiotape, which reportedly also contains improper
conversations between COMELEC officials and members of the
opposition. House Speaker Jose de Venecia commented that in
the end the majority voted to go ahead and play the tapes
"because there is nothing to hide and we want the Filipino
people to know the truth."


9. (U) Across town at the Senate, the inquiry into jueteng
and charges that members of President Arroyo's family engaged
in profiteering also continued. Committee co-chairs Manuel
"Manny" Villar and Manuel "Lito" Lapid resisted Malacanang's
efforts to turn the investigation over to the Office of the
Ombudsman. Villar issued a statement that the Senate would
not tolerate intimidation of witnesses, after Archbishop
Oscar Cruz, an anti-jueteng advocate who has called for
Arroyo to resign from office, repeated claims that his life
was under threat.


10. (C) An impeachment motion filed on June 28 (ref b) was
modified on June 30 in order to accuse Arroyo of "conduct
unbecoming" a President. Several opposition members claimed
the motion was deliberately vague so that the pro-Arroyo
majority in the House could more easily dismiss the motion on
technical grounds. Lawmakers have moved to include the
motion in the order of business in the House. According to
July 1 comments by House administrator Artemio Adasa, the
complaint is now on track to be referred to the 55-member
House Committee on Justice (dominated by PGMA supporters) no
later than the middle of August, after the next formal
session begins on July 25. After receiving the complaint,
the committee must produce a report within 60 session days
recommending whether or not the complaint has sufficient
substance for further review by the House. A one-third vote
(79 members) is then needed in order to pass the impeachment
motion on to the Senate. Mikey Arroyo and other politicians
have predicted privately that any impeachment motion will
almost certainly not get far in the House given the
pro-Arroyo majority there.

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Rallies
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11. (U) The opposition continues to hold anti-Arroyo
rallies, though turnout remains small by Filipino standards.
Peaceful rallies of between 1,000 to several thousand people
took place in the central business district of Makati on July
1 and June 30. In Cebu City, about 1,000 leftists rallied in
front of the Cebu Presidential office, a.k.a., the
"Malacanang of the South." There were no reports of violence
during the protests. Opposition figures say there will be
additional rallies in days to come.


12. (U) The opposition has decried what its members call
the Administration's "clampdown on the freedom of speech,"
claiming that it has been difficult to muster crowds largely
because Metro Manila mayors friendly to Arroyo fail to issue
permits and the Philippine National Police (PNP) is
"uncooperative." Those in the pro-Arroyo camp have asserted
that the opposition's rallies have basically been small
because of a lack of interest among the public. Other
observers have noted that it is now the rainy season, which
dampens participation and makes rallies and marches more
difficult to pull off. There are many allegations that
protesters have received payment for turning out.

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Comment
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13. (C) Arroyo remains under pressure. The opposition
continues its steady drumbeat against her, and she is getting
little sign of strong support from her ostensible supporters
(many of whom have always been lukewarm towards her).
Expected price rises stemming from the onset of the expanded
Value Added Tax on July 1 could also further roil the waters
(septel will describe the limited economic impact so far of
the political drama, along with the resignation of Secretary
of Agriculture Yap due to charges of tax evasion). Arroyo
seems to be having some success in steadying the ship,
largely by insisting that she remains focused on her
substantive agenda. Unless she faces dramatic slippage in
support, perhaps due to new revelations, impeachment appears
unlikely but the saga will continue to unfold.

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MUSSOMELI