Philippines' new president inherits 'bankrupt' treasury, prosecutor says

In this story: National deficit swells Bank accounts linked to Estrada frozen RELATED STORIES, SITES

From staff and wire reports.

MANILA, Philippines -- New Philippine President Gloria Macapagal-Arroyo has inherited an empty treasury, the chief prosecutor of her predecessor was quoted on Wednesday as saying.

"The government is bankrupt, its coffers are empty," Joker Arroyo was quoted as saying by the Philippine Star newspaper.

AUDIO CNN's Marga Ortigas comments on former President Estrada's movements 275k/25 sec. AIFF or WAV sound    GALLERY Scenes of protest across the Philippines    RESOURCES Chronology of Estrada's loss of moral authority in the Philippines    RESOURCES Follow a timeline showing President Estrada's recent political crisis    MESSAGE BOARD Estrada trial     ALSO "Just call me Mike," says Philippines' first husband Text of Estrada statement Philippine embassy in Washington dumps Estrada

The disclosure by the prosecutor was made a day after Philippine officials barred former President Joseph Estrada from leaving the Philippines while the Senate prepares to resume his impeachment trial on graft and corruption charges.

New President Gloria Macapagal-Arroyo, 53, was sworn in as the nation's leader last weekend after the Supreme Court stripped Estrada of his title following announcements by the military, the police and most members of the Cabinet that they could not serve under him.

National deficit swells

Joker Arroyo, no relation to the president, was the chief prosecutor in Estrada's impeachment trial on corruption charges, which disintegrated last week leading to the revolt, which swept his namesake to power.

The Philippines posted a budget deficit of 136.1 billion pesos ($2.8 billion) last year, more than double the original target.

Estrada's administration had forecast a budget deficit of 130 billion pesos for 2001. New Finance Secretary Alberto Romulo said on Monday there were "payables" that had not been paid.

"So obviously, I would know as soon as I get the real score," Romulo said. "Obviously, if you add the list of payables that have not been paid to the 130 billion, that would have been a bigger budget deficit," he said.

A government source put the accounts payable at 70 billion pesos.

Bank accounts linked to Estrada frozen

Meanwhile, the Justice Department issued a "hold departure" order on Estrada, his wife and his son Jinggoy, barring them from leaving the country, Justice Secretary Hernando Perez announced on Tuesday.

The ombudsman has accused Estrada of economic plunder, an offense that carries a maximum penalty of death.

The government on Tuesday froze bank accounts linked to Estrada on the grounds that the former action movie star was suspected of committing tax evasion. Estrada has denied any wrongdoing.

During the impeachment trial, prosecutors had asked that evidence be admitted about bank accounts suspected of belonging to Estrada, which they said, sheltered ill-gotten money.

The trial collapsed when the Senate voted against admitting the bank account information. The frozen accounts, along with Pimentel's announcement on Tuesday that the trial would continue, heightened speculation that the account information eventually would be allowed as evidence.

More than 100 protesters gathered outside two Manila banks on Tuesday, vowing to prevent Estrada from gaining access to accounts he allegedly has there.

CNN Correspondent Maria Ressa, The Associated Press and Reuters contributed to this report.

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President Joseph "Erap" Ejercito Estrada
Bagong Alyansang Makabayan (BAYAN)
Philippine House of Representatives

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