Arroyo's "bold measures" disappoint

By Alex Frew McMillan in Hong Kong

MANILA, Philippines -- Philippine President Gloria Macapagal Arroyo's measures to help the country's economy were given a cool welcome Monday.

Arroyo presented a package of plans aimed at boosting business on Friday, at a gathering of commercial leaders in downtown Manila.

But the plans, billed as "bold measures," mainly rehashed initiatives that were already in the works. The president said she would speed up privatization plans and boost tax collection.

She promised to push through a money-laundering bill that has stalled in congress, as well as a new Investment Company Act.

"I'm not a high flier, but I'm a plodder"

The president said she would move slowly and steadily to improve the Philippines' business climate.

"Because we remain fundamentally committed to the market economy, in this administration, there should be no major surprises in terms of economic policies and orientation," she said.

"I'm not a high flier, but I'm a plodder," she added.

Arroyo also announced a "massive crackdown" on the Abu Sayyaf guerrillas in the southern Philippines.

That has led to 71 arrests since last Thursday, though authorities had to release 30 suspects due to "weak evidence."

Business community "disappointed"

The markets had eagerly awaited her economic measures. Members of the associations representing analysts, investment houses and fund managers came to hear her speech Friday in Makati, Manila's business district.

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"The [business] community was a little bit disappointed," said Andrew Long, head of research at Vickers Ballas Securities Philippines.

Arroyo was long on rhetoric and short on details, he added.

The Philippine peso is trading at over 53 to the U.S. dollar. Stocks and direct investment by overseas companies have been hurt by the Abu Sayyaf saga and a spate of kidnappings in metro Manila.

But they got little boost from the president. In Manila, the benchmark Philippines composite index was trading down 0.02 percent at 1,396.04 shortly before the noon break.

The peso slumped to a six-month low of 53.42 on Monday, on worry defense spending would boost an already burdensome budget deficit.

Long said the financial community had hoped for more specifics from Arroyo. For instance, investors are looking for word on demand for the Philippines' $500 million bond issue.

Book building is under way, but interest has likely been damaged by the financial crisis in Argentina. The prospect of default has spooked investors about emerging-debt.

But business interests were glad the president is at least listening to their grievances. Arroyo also pledged that new Finance Secretary Jose Camacho would spearhead reforms.

Camacho has said Arroyo plans more economic measures in her state of the nation address when congress reconvenes on July 23.