This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 MANILA 003397 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR EAP, EAP/PMBS, INR/EAP, DS 
NSC FOR GREEN 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PINS PINR ECON ASEC RP
SUBJECT: ARROYO GIVES STATE OF THE NATION ADDRESS, WHILE 
OPPOSITION HOLDS RALLY 
 
REF: A. MANILA - EAP/PMBS 07/25/05 E-MAIL 
     ¶B. OPS CENTER - MANILA 07/25/05 TELCON 
     ¶C. MANILA 3391 
     ¶D. MANILA 3367 
     ¶E. MANILA 3326 
 
¶1.  (U) This message is Sensitive But Unclassified.  Please 
handle accordingly. 
 
¶2.  (SBU) Summary:  President Arroyo gave her State of the 
Nation Address (SONA) late July 25.  In a short speech, she 
claimed that her government had made great strides in 
strengthening the economy and she promised to hold the 
course.  She urged reform of the political system, stating 
that it was inadequate to meet the country's current 
challenges.  She recommended that the Philippines' examine 
constitutional changes that would transform the two houses of 
Congress into a parliamentary system and she spoke warmly 
about federalism.  She said "permanent peace in Mindanao is 
within reach."  Many opposition legislators boycotted her 
speech and an anti-Arroyo rally drew roughly 30,000 people. 
No violence was reported.  The speech did not contain any 
surprises, though it was less detailed than expected. 
Mission will report on reaction as it flows in.  End Summary. 
 
¶3.  (U) President Arroyo gave her SONA late July 25.  The 
speech was short, about 25 minutes.  (Note:  Ref a contains 
the text of the speech.  End Note.)  Arroyo spoke firmly and 
was often interrupted by applause (many in the opposition 
boycotted the speech -- see below).  Arroyo began by noting 
that "ours is a country divided" between an economy "now 
poised for take off" and a political system that has become 
"a hindrance to progress."  She said there was good news in 
regard to the economy which continued to grow and create 
jobs.  She said that her "non-nonsense budget" had helped the 
economy by raising needed revenue and cutting into borrowing 
-- despite the fact that oil price rises had hurt growth. 
She said she would not waver in moving forward her economic 
plans no matter the opposition. 
 
¶4.  (U) Arroyo related that over the course of time the 
country's political system had degenerated.  The country had 
to "overcome our tendency to be our own worst enemy."  She 
urged that all sides take care not to undercut the progress 
that has been made in the country:  "We may disagree among 
ourselves, but let us never lose sight of that greater battle 
for one people, one country, one Philippines."  Speaking in 
general terms and without offering a timetable, she then 
recommended that the Philippines' examine constitutional 
changes that would transform the two houses of Congress into 
a parliamentary system similar to that of "our progressive 
neighbors in the region."  She said that such changes were 
within the ambit of Congress to decide on, but said that the 
calling of a "Constituent Assembly" was one possible way 
forward.  She spoke warmly about federalism and devolving 
powers to localities. 
 
¶5.  (U) She urged the swift passage of an anti-terrrorism 
law.  Regarding ongoing tensions in the south, she said 
"insurgency had abated" and "permanent peace in Mindanao is 
within reach."   She claimed that "80 percent" was done in 
regard to the peace talks involving the Moro Islamic 
Liberation Front (MILF).  She hailed the Philippines' 
relationship with the Organization of Islamic Conference 
(OIC).  She said that "our victories in the war on terror 
have been acknowledged by no less than President Bush before 
the U.S. National Defense University."  Jemaah Islamiya and 
the Abu Sayyaf had been dealt with and "can only pick up the 
pieces of its broken backbone". 
 
¶6.  (U) All of the leftist "Party List" representatives in 
the House boycotted Arroyo's speech, as did many other 
Opposition members of Congress.  However, members of the 
Liberal Party, many of whom have called for Arroyo's 
resignation, declined to join the boycott, stating that it 
was their "constitutional duty" to participate in the SONA. 
 
¶7.  (U) Media and police estimate that roughly 30,000 or so 
attended an anti-Arroyo rally in Quezon City near the House 
of Representatives.  According to Pol FSN who observed the 
rally, most participants appeared to be supporters of leftist 
political groups.  While the crowd was much smaller than the 
80,000 protest organizers had predicted, it marked one of the 
larger turnouts for the Opposition to date.  A smaller number 
of pro-Arroyo demonstrators gathered near the House to show 
their support for the President.  Approximately 6,000 riot 
police, supplemented by 1,000 Philippine Army troops, set up 
barricades to keep the protesters away from the site of the 
SONA.  As of 5:30 PM on July 25, there were no reports of 
violence. 
¶8.  (SBU) Comment:  The speech did not contain any surprises, 
though it was less detailed than we expected.  Contacts had 
told us that -- in addition to other issues -- it might focus 
on such issues as corruption and provide more details about 
the "truth commission" that Malacanang recently proposed, but 
it did not.  Arroyo also did not directly address the recent 
scandals over audio tapes and illegal gambling, and the 
Opposition's filing of impeachment charges earlier in the day 
(see ref C).  Malacanang seems to have decided to keep it all 
very lean.  Mission will report on reaction as it flows in. 
 
Visit Embassy Manila's Classified SIPRNET website: 
http://www.state.sgov.gov/p/eap/manila/index. cfm 
 
You can also access this site through the State Department's 
Classified SIPRNET website: 
http://www.state.sgov.gov/ 
 
MUSSOMELI