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Joel Nito.
Giving a speech in Quezon City, Estrada says he will never resign.
Unbowed Under Fire
A powerful coalition builds against him, but Estrada remains defiant

Bracing for the fallout: As Manila's crisis deepens, a nightmare scenario looms: a new Asian Crisis
'Confidence is Key': Gloria Macapagal Arroyo says that she can restore it

The flurry of yellow among the protesters brought to mind the 1986 People Power revolution. But there the similarities ended. There was no Corazon Aquino, the democracy icon who had stood up to the tanks 14 years ago. No Fidel Ramos, the general who had backed her and ensured the success of the revolt. No massive demonstration of popular outrage. Instead, the Oct. 18 rally in the Makati business district featured a motley coalition of left-wing agitators and NGO-types, united only by a desire to unseat President Joseph ("Erap") Estrada. The man of the hour was the dubious Luis "Chavit" Singson, a self-professed crony of Estrada before the two fell out. This was no revolution of heroes.

Resign, demanded the crowd. Estrada's response: No way. Further north in Quezon City that same day, Estrada was addressing his supporters with these fighting words: "I will never resign! I have a sworn duty to the masses! My term of office is until the year 2004." Battle lines were being drawn, and this being the Philippines, worries arose about martial law being imposed or a coup being launched or the country simply descending into chaos. Remarked Finance Secretary and close Estrada adviser Jose Pardo: "A storm signal is now over the country."

You can say that again. The current storm began on Oct. 9, when Singson, a former gambling and drinking buddy of Erap, went public with revelations that he had personally delivered to the president a total of $11.7 million, much of it gambling proceeds from an illegal numbers game called jueteng. Estrada denied the allegations, but that did not stop the credibility of his administration, long dogged by charges of corruption and incompetence, from going into tailspin. The scandal ("juetengate") also plunged the economy into turmoil, battering business confidence, depreciating the peso and raising questions of a contagion effect on the rest of Asia. The question now is whether the embattled president will be forced to step down — and whether the country has a viable alternative if he does.

As it is, says political scientist Alex Magno, "the first vital battleground in this political war is not in the streets but in the peso exchange rate. If the administration cannot contain the peso's fall, everything will be lost." Last week, the peso sank to an all-time low of 49 to the dollar, while the Philippine Stock Exchange Index hit 1,264 points, the lowest level in two years. Economic Planning Secretary Felipe Medalla says GDP growth projections for 2001 have been reduced by half a percentage, from 4.5%-5% to 4%-4.5%. Regional analysts give a forecast of under 3%.

To defend the peso, the Philippine central bank encouraged commercial banks to raise interest rates from 15% to 25%; some banks began charging as high as 35%. Many experts warn, however, that such a drastic step will only make things worse by strangling businesses, triggering mass layoffs and killing consumer spending. "No amount of monetary solution will solve the problem, because the problem is not monetary but political," says economist Romulo Neri.

Big Business agrees. The country's leading businessmen point to a loss of confidence as the main factor behind the economic crisis. To restore confidence, they say, Estrada must go. "Fundamentally, the economy is okay," says Rufino Manotok, managing director of real-estate and banking giant Ayala Corp. "But juetengate has created a negative perception in the investor community. So stocks and the peso are being pummeled." On Oct. 18, 41 opposition congressmen started impeachment proceedings against Estrada on grounds of bribery, graft and corruption, betrayal of public trust and culpable violation of the Constitution.

The business community is not the only sector Erap has alienated. On Oct. 11, Cardinal Jaime Sin, head of the powerful Catholic Church, declared that the president had lost his "moral ascendancy to govern." Estrada's key political allies have also been distancing themselves from him. The most prominent is Vice President Gloria Macapagal Arroyo, who resigned from her cabinet post of secretary of social welfare and development. But she held on to the vice presidency, meaning she remains the constitutional successor to Estrada. While Arroyo has not directly attacked her boss, she has offered to lead Estrada's opponents. "We must improve moral standards in government and society to provide a strong foundation for good governance," she told Asiaweek (see interview page 30). Perhaps ominously, foreign diplomats were seen at a recent press conference by Arroyo.

Estrada, however, remains unrepentant. Charging that Singson's exposE is part of a political conspiracy against him, Erap has accused his predecessor Ramos of trying to destabilize his government. Senate Majority Leader Francisco Tatad, a firm supporter of Estrada, warns of an "Indonesia-type situation" similar to the 1965 upheaval that led to the downfall of then-president Sukarno. Retired Brig.-Gen. Jose Almonte, who served as national security adviser under Ramos, sneers at such claims: "There is no need to destabilize Estrada. He is the best destabilizer of his own government."

On Oct. 14, Estrada went on national radio and television to offer an apology — of sorts. He announced that the government was pulling out of gambling and selling the state gambling firm, the Philippine Amusement and Gaming Corp., to private investors. "Obviously, our people do not approve of having the government itself involved in any form of gambling, no matter what its intentions may be," he said. A business critic retorted: "The guy misses the point. The problem is not gambling but himself."

Estrada has not conceded that point, nor is he likely to see a need to. The coalition against him might be powerful, but he holds the upper hand in any impeachment proceedings since his Party of the Filipino Masses (LaMP) controls both Congress and the Senate. Of the 219 members of the House of Representatives, LaMP accounts for about 148. Oppositionist Etta Rosales claims, somewhat hopefully, that "many of them are wavering in their support for the president." But even if there are sufficient defections to the opposition's cause, impeachment is far from a done deal.

The impeachment motion must first be filed with the House secretary-general, who in turn endorses it to the House speaker. The speaker then has 10 days to endorse it to the 44-member Committee on Justice. Here, the opposition has only nine members, and a simple majority vote can defeat the resolution and prevent it from reaching the floor for debate. Even if it is sent to the floor, the resolution needs at least 73 votes to succeed. If the House impeaches the president, the 22-member Senate conducts the trial, with the chief justice presiding. LaMP has 15 senators.

Further boosting Estrada's position have been recent survey results by Pulse Asia, a respected Manila pollster. According to its findings, 53% of respondents in Metro Manila do not want the president to resign (31% agree that he should resign, while 16% are undecided). Asked if they still trusted the president, 38% said yes, 29% said no and 31% were undecided. "The survey is saying that given all that has been happening, the people still give the president the benefit of doubt," says Pulse Asia president Felipe Miranda.

Estrada was naturally pleased with the poll findings. "It is clear that the people are still behind me," he declared. But Sen. Ramon Magsaysay Jr., a former Erap ally who has withdrawn from the ruling coalition, sees it differently. "The people are afraid that if the president steps down, things will go awry," he says. "We are in deep trouble. We need somebody who can be trusted by and can inspire the people."

And therein lies the crux of the issue. The Philippines has not had many such leaders, and in the eyes of many ordinary Filipinos, Estrada's supposed corruption is hardly unique. "Estrada is no better than his precedessors," says taxi driver Hernando Canlas, 38. "But then, past presidents did no better than Estrada." Erap is simply a product of a dirty system where venal politicians, moneygrubbing businessmen and corrupt bureaucrats all slosh around in the same slimy pit.

In this context, the possibility of Arroyo taking over from Estrada is not universally welcomed. Her background in economics makes her a favorite among businessmen, who warm to her global outlook and her understanding of business. But as far as others are concerned, she is cut from the same elitist cloth as the country's ruling classes — her populist image notwithstanding, she comes from a wealthy land-owning family — and there are suspicions that she too has links to the jueteng business. Thus, some demonstrators at the Oct. 18 rally were also calling on Arroyo to step aside. "She cannot be part of the solution," read a leaflet.

So where does this leave the country? With few choices. Ousting Erap will be hard. So will be enduring his presidency for four more years. But hardest of all will be building a clean political culture that produces unimpeachable leaders.

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