Magazine article Business Asia

Crunch Time for Arroyo

Magazine article Business Asia

Crunch Time for Arroyo

Article excerpt

IT SEEMS new Philippines President Gloria Macapagal Arroyo's political honeymoon is already over.

Less than a month since Arroyo was swept into power on the back of massive public demonstrations against then-President Joseph Estrada, local and foreign analysts have started to question just how capable the new leader will be in tackling the massive problems left behind by the old administration.

Arroyo was sworn into office on January 20 by the Supreme Court after Estrada left the presidential residence. Her climb to power followed mass demonstrations in which up to one million Filipinos protested the Senate's decision to bar the examination of potentially damaging evidence in the former President's impeachment trial.

Arroyo's rise to power is being compared to that of Corazon Aquino, who became President after popular protests toppled then-dictator Ferdinand Marcos in 1986. Yet Aquino's presidency saw the economy stagnate and Marcos live in luxurious exile, and Arroyo, foreign-educated and holding a doctorate in economics, is under pressure not to let history repeat itself.

Arroyo inherits an economy threatened by a widening budget deficit, accelerating inflation and slowing exports. Though interest rates are falling, they may still be too high to get companies investing in their businesses.

One of the new Government's most pressing tasks will be to rein in the Budget deficit. …

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