POSITIVE MEDIA COVERAGE FOR ARROYO SPEECH, BUT

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 003413 SIPDIS DEPT FOR EAP, EAP/PMBS, INR/EAP, EAP/PD NSC FOR GREEN E.O. 12958: DECL: 07/26/2015 TAGS: PGOV PINS PINR PREL ECON KPAO RP SUBJECT: POSITIVE MEDIA COVERAGE FOR ARROYO SPEECH, BUT LITTLE SIGN THAT IT CHANGED MINDS REF: A. MANILA 3397 ¶B. MANILA - EAP/PMBS 07/25/05 E-MAIL ¶C. MANILA 3391 ¶D. MANILA 3367 Classified By: Political Officer Timothy Cipullo for Reasons 1.4 (b) and (d). ¶1. (C) Summary: President Arroyo's July 25 State of the Nation Address (SONA) netted positive coverage in the media. Political reaction generally fell along predictable lines, with supporters asserting that it was an excellent speech, while the opposition castigated it. On the economic side, reaction was mixed, with contacts demanding that she follow up on her promises. Overall, Arroyo possibly gained a small degree of momentum ahead of the House's review of the Opposition's impeachment complaint, but there is little sign that she really changed the political equation in her favor. End Summary. Positive Media Reaction ======================= ¶2. (U) Media coverage of President Arroyo's SONA was largely upbeat. (Note: See refs a-b for a review of the speech and its full text. End Note.) Manila newspapers contained large photos of Arroyo delivering the speech in the House of Representatives and reported that she was interrupted by "34 rounds of applause." Articles also placed a spotlight on the bid to impeach the president and the fact that it failed to gather enough signatories to gain immediate referral to the Senate when it was filed on July 25 (refs a and c). Media analysis of the speech, however, was more evenhanded; radio talk shows seriously questioned the utility of President Arroyo's proposal for Constitutional changes, for example. Despite the positive front-page headlines, several columnists asserted that the SONA was extremely brief (in fact, the shortest on record) and seemed to lack substance. As one columnist, Max Soliven of the centrist "Philippine Star," wrote: "Yesterday's SONA didn't measure up to a 'forward march' address, but represented La Gloria (i.e., Arroyo) digging in her heels and claiming a 'glorious' status quo. A status quo is not enough." Predictable Political Reaction ============================== ¶3. (C) Political reaction generally fell along predictable lines, with Arroyo's supporters asserting that it was an excellent speech, while the opposition castigated it. Malacanang Secretary for Political Affairs Gabriel "Gabby" Claudio, noting the many interruptions for applause the speech engendered, stated, "Judging from the way the audience reacted, I think it was a very appropriate speech and fitting tribute to the legislators, the local government officials and to all other Filipinos who are looking forward to the reforms that will bring about progress to the country." House Speaker Jose De Venecia, a close ally of the President's, welcomed Arroyo's plan to work toward implementing a parliamentary system of government as a "dramatic and historic change." Other House representatives that Mission touched base with praised the speech and said that the House would immediately begin work on Constitutional changes. In a conversation with Acting POL/C, Congressman Anthony Miranda, an Administration supporter, emphatically praised the speech, claiming that Arroyo had shown herself to be "a strong leader." ¶4. (U) However, some Arroyo allies were less than impressed with her calls for changing the Constitution. Pro-Administration senators Miriam Defensor-Santiago, Pia Cayetano, and Manuel "Mar" Roxas II argued that Arroyo should deal with other issues before tackling the issue of possible Constitutional changes. Roxas told the press on July 25, "The Constitution is not the problem. It did not cause this political crisis." (Note: Many senators of all political stripes are unhappy with the proposals to change the current bicameral system to a unicameral legislature given that the Senate would be abolished.) ¶5. (C) The Opposition, not surprisingly, was quick to attack the President's speech, sometimes in harsh terms. In a July 26 conversation with Poloff, Lito Banayo, a political adviser to Opposition Senator Panfilo Lacson, characterized Arroyo's speech as a "tactical move" designed to pander to Congress to dissuade its members from acting on the recently-introduced impeachment complaint (ref c). Senate Minority Leader Aquilano Pimentel Jr. echoed these sentiments and went on to label the speech "a pack of lies and half-truths to buy her time." Others criticized the speech for what they felt was its brevity and lack of detail. Archbishop Oscar Cruz, a Catholic prelate with close Opposition links, said Arroyo's speech was no different than previous SONAs, which he said were full of "failed promises." Economic Side: Wait and See ============================ ¶6. (C) Early business community reaction to the address was mixed, but few business leaders gave Arroyo very high marks. Philippine Chamber of Commerce and Industry President Donald Dee, who has supported Arroyo throughout the recent political turbulence, gave the President credit for saying "what we (in business) wanted to hear: that she would focus on the economy and that she would allow political reforms to take place." Leaders in the Chinese-Filipino business community told us they strongly support Arroyo and want to see her implement more reforms. Many Filipinos are eager to move beyond this period of turbulence as it works against business interests. Other business leaders, however, were less enthused. Makati Business Club Executive Director Bill Luz, who has called for Arroyo's resignation, said, "I am disappointed with the President's address. She skirted the leadership issues." Many, including foreign investors, expressed some disappointment, but concurred that she accomplished the short-term goal of promising enough to maintain the immediate economic calm by focusing on the accomplishment of the three fiscal reform initiatives Congress passed last year (the amended VAT law, the amended "Sin" Tax, and the lateral attrition law). The local stock and currency markets seemed to reflect that assessment, opening July 26 basically unchanged and trading slightly up at mid-day. Comment ======= ¶7. (C) Overall, Arroyo probably gained a small degree of momentum via the speech. Most neutral observers seem to agree that the speech was a bit short and not extremely impressive in content. However, during what has been a very difficult timeframe for her, it was a political boon for Arroyo to be able to present herself as the leader of the country standing before a giant Filipino flag. None of her opponents can present such an image and she took full advantage of the trappings of office. Despite the positive visuals, there is little sign that she really changed the political equation in her favor. In any case, she will need whatever traction she has picked up in the next several weeks and months as the House reviews the Opposition's impeachment complaint. Visit Embassy Manila's Classified SIPRNET website: http://www.state.sgov.gov/p/eap/manila/index. cfm You can also access this site through the State Department's Classified SIPRNET website: http://www.state.sgov.gov/ MUSSOMELI