Arroyo faces daunting task of rebuilding nation

Philippine President-elect Gloria Macapagal Arroyo faces a daunting task of uniting a politically and socially divided nation and lifting the economy mired in mounting debt and widespread poverty.

Arroyo, formally proclaimed by Congress on Thursday as the winner of the May 10 presidential election despite opposition charges of fraud, is to be sworn into office on June 30.

With a full six-year term ahead, Arroyo is confronted with a big challenge of putting together a severely fractured nation and healing the wounds as she was in January 2001 when she assumed presidency after her corruption-tainted predecessor Joseph Estrada was ousted in a military-backed popular revolt.

Pursuing her quest for healing and unity, as she had done over the past three years, 57-year-old Arroyo called for a truce between her administration and the opposition after her proclamation.

"This is the time for forgiveness and letting go of the past. National interest demands solidarity," she said.

But Arroyo's offer of reconciliation was described as "empty rhetoric" by Senator Edgardo Angara, leader of the main opposition party Laban ng Demokratikong Pilipino (Fight of the Democratic Filipino).

Meanwhile, Arroyo's closest rival in the election, opposition candidate Fernando Poe Jr., said two days ago that he is open to reconciliation with the administration, but first the truth must be revealed.

The 64-year-old movie star, who lost to Arroyo by over 1.12 million votes, claimed earlier this month that Arroyo would be a "bogus" leader if she is proclaimed president.

Poe's supporters have threatened to launch mass protests against alleged massive fraud by Arroyo's camp in the election, an accusation dismissed by the administration as part of a plot to destabilize the government.

Arroyo's Socioeconomic Planning Secretary Romulo Neri said last week that reforming the country's political system which is a drag on economic growth may be the most vital task facing the winner of last month's presidential race.

"Politics stand in the way of growth. It's hard to do economic reform unless you reform politics," he said.

All agree that if the country must move forward, people must get over their political differences. The problem is this is easier said than done.

"With so much political poison in the air, and so many hurts in the wake of heated political campaigns, and after all those black propaganda, mudslinging and muckraking, it would take some time if ever, to heal political wounds," columnist Emil Jurado wrote recently in the ManilaStand newspaper.

"As the poll fever dies down, it will be the usual day-to-day political tug-of-war...To change our Philippine culture is like expecting to erase the stripes of the tiger," he wrote with a pessimistic note.

Besides the seemingly insurmountable task of unity and reconciliation, Arroyo also faces the short-term challenge of raising state revenues and reducing debt, economists said.

The Philippines is caught in chronic budget deficits, due largely to poor tax collection, which forced the government to borrow heavily abroad.

The Philippine government aims to keep the budget deficit at 197.8 billion pesos (3.5 billion US dollars) or 4.2 percent of gross domestic product (GDP) this year, and to achieve a balanced budget by 2009.

The country is now the second largest sovereign debt issuer in the region after Japan. The public sector debt rose to 5.3 trillion pesos (94.6 billion dollars) last year, larger than the value of the economy's total output.

The huge deficit and debt service not only leave little room to improve the quality of education, the health system and the poor infrastructure, but also is eroding the country's attraction for private investment, Neri admitted.

Foreign direct investment plunged 82 percent to 319 million dollars last year, according to the Manila-based Asian Development Bank.

Although modest inflation-adjusted annual economic growth has reached about 4 percent during the past few years, the country's unchecked population growth rate of 2.36 percent a year, highest in the region, eats away much of the economic growth.

According to government figures, about one-third of the country's 84 million population live on less than one dollar a day, and the unemployment rate climbed to 13.7 percent as of end-April.

Arroyo said last month that if elected, she would complete the economic and political reforms she launched three years ago.

And many believe, despite the great challenges facing her, Arroyo has a better chance now to push for her reform agenda since she now has a term limit and won't have to worry about seeking re-election. She also enjoys a solid majority backing her in Congress, including a Senate majority of at least 14-9.