Embattled Philippine President Gloria Macapagal Arroyo said on Thursday she will not step down but had asked her cabinet to resign to give her the freedom to push economic and political reforms. Arroyo, who has been under mounting pressure to quit over opposition allegations she cheated in last year's election and that members of her family took payoffs from illegal gambling, said the new cabinet would have a "free hand on governance".
Courtesy resignations are the norm in the Philippines before a reshuffle. Arroyo did not name the cabinet members who would lose their posts or any potential replacements. Weeks of political crisis and a court freeze on a tax package at the heart of her reforms have unnerved investors.
Analysts said uncertainty would prevail until Arroyo named her new economic team to carry out efforts to improve weak revenue collection and cut debt of nearly $70 billion.
"It is simply the truth that the political system that I am part of has degenerated to the point that it needs fundamental change," Arroyo said in a live broadcast on radio and television. "This is neither a political ploy nor a gimmick. I believe that this process will quickly lay the foundation for deep reforms in our society."
Arroyo, whose second term is due to run until 2010, has made no secret of plans to change the two-chamber congressional system to a single parliament to speed up passage of laws. "Panic moves show that the end is near," Aquilino Pimentel, an opposition senator, told reporters. "She jumped the gun on her 14 cabinet members who were planning to resign."
Jose Mario Cuyegkeng, an economist at ING Bank in Manila, said her economic team had done a good job of improving revenues.
"If there are major changes, that will lead to uncertainty as to the direction of the fiscal programme and this is what ratings agencies and investors are looking at," he said.
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