VZCZCXRO7996
OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHML #1586/01 2091022
ZNR UUUUU ZZH
O 281022Z JUL 09
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4743
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RHHMUNA/CDRUSPACOM HONOLULU HI IMMEDIATE
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 MANILA 001586 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MTS 
 
E.O. 12958:N/A 
TAGS: PGOV PREL PINS PINR SOCI PTER ECON KPAO ASEC RP
SUBJECT:  THE BEST DEFENSE: IN FINAL ADDRESS TO THE NATION, ARROYO 
TOUTS ACHIEVEMENTS, SLAMS CRITICS 
 
REF: MANILA 1568 (SUSPENSION OF MILITARY OPERATIONS AGAINST ROGUE 
MUSLIM REBELS) 
MANILA 1207 (POLITICAL MANEUVERS SHIFT ELECTION LANDSCAPE) 
 
¶1. (SBU) SUMMARY: In her ninth and final State of the Nation Address 
(SONA) July 27, President Gloria Macapagal-Arroyo confidently touted 
a seemingly endless list of economic achievements: the country's 
resilience in the face of the global financial crisis; its 
successful welfare, social, and infrastructure programs; and its 
eight years of robust economic growth under her leadership.  She 
defended her legacy by attacking her opponents and casting herself 
as a champion of democracy, hoping to put to rest concerns that she 
might extend her term beyond its natural end in 2010.  President 
Arroyo devoted few words to recent advances on resuming peace talks 
with communist insurgents and Mindanao's Muslim rebels (ref A) and 
only briefly addressed security concerns.  Faulting "the West" for 
its role in generating the global financial crisis, she nonetheless 
highlighted the positive direction of U.S.-Philippine bilateral 
relations, illustrated by the veterans' benefits package and her 
meeting later this week with President Obama.  But for those who 
speculated Arroyo intended to stay in power one way or another, the 
speech did seem to signal she will depart the presidency at the end 
of her term.  END SUMMARY. 
 
HIGHLIGHTING ECONOMIC GAINS 
--------------------------- 
 
¶2. (SBU) In her ninth and final State of the Nation Address (SONA) 
on July 27, President Gloria Macapagal-Arroyo trumpeted her 
accomplishments in office, focusing on the country's economic 
resilience that cushioned the impact of the global financial crisis, 
which, she emphasized, "the best in the West failed to anticipate." 
She exuded optimism and determination to stay the course until her 
last day in office, pledged greater investment in education, and 
sought the passage of legislation to sustain these economic gains. 
She cited statistics noting that the economy posted uninterrupted 
growth for 33 quarters and doubled its size from $76 billion to $186 
billion.  Average GDP growth from 2001 to first quarter of 2009 was 
the highest in 43 years.  GNP per capita rose from $967 to $2,051, 
and eight million jobs were created at an average of one million 
jobs per year.  Self-rated poverty, she noted, decreased from 59 
percent to 47 percent during her tenure, despite the country's 
increase in population. 
 
SECURITY AND BILATERAL CONCERNS 
------------------------------- 
 
¶3. (SBU) President Arroyo sparingly addressed issues of bilateral 
concern, including security and counterterrorism.  She acknowledged 
the "good prospect" for peace talks with communist insurgents and 
Mindanao's Muslim secessionists (ref A), expressing her sincere wish 
for peace in Mindanao, which would be a "blessing for all its 
people, Muslim, Christian, and Lumads (indigenous people)."  She 
asked the Philippine Congress to fund a strengthening of the 
nation's law enforcement capacity to protect citizens in all corners 
of the country from crime, and noted the continued success of 
programs to incentivize the demobilization of communist insurgents. 
Proudly, she announced that later this week she would be the "first 
Southeast Asian leader" to meet President Obama at the White House, 
presenting an opportunity to discuss counterterrorism, nuclear 
non-proliferation, climate change, and global recession. 
 
ATTACKING HER CRITICS 
--------------------- 
 
¶4. (SBU) Toward the end of her speech, Arroyo returned the criticism 
she had received in recent months from her opponents, many of whom 
accused her of misgovernance and corruption.  While she herself was 
falsely accused of corruption, she said that "Many who accuse me of 
it have lifestyles and spending habits that make them walking proofs 
of that crime."  In an indirect, witty reference to her predecessor 
and fiercest critic, former President and convicted felon Joseph 
Estrada, she said, "Those who live in glass houses should cast no 
stones.  Those who should be in jail should not threaten it, 
especially if they have been there."  Her comment drew laughter from 
the audience. 
 
PREDICTABLE REACTIONS FROM TWO CAMPS 
------------------------------------ 
 
¶5. (SBU) Supporters of President Arroyo were predictably ebullient 
in their praise.  Speaker Prospero Nograles, a known ally of 
President Arroyo, called the SONA "tough but accurate and full of 
substance."  Despite criticism and low popularity ratings in the 
polls, he said, Arroyo delivered on her commitments.  Chief Justice 
Reynato Puno similarly commended Arroyo for her accomplishments, 
noting an increase in budget appropriations for the judiciary. 
 
MANILA 00001586  002 OF 002 
 
 
Palawan Representative Antonio Alvarez said the presidential address 
was a "fighting, feel-good, factual speech, which, best of all, was 
rendered mostly in Filipino to better rally us to have more faith in 
ourselves."  Albay Governor and presidential economic adviser Jose 
Salceda opined that the next President will be lucky to inherit an 
"unused credit card." 
 
¶6. (SBU) President Arroyo's political opponents, including House 
Minority Leader Ronaldo Zamora, Bayan Muna Representative Teddy 
Casio, and Makati Mayor Jejomar Binay, expressed disappointment 
that she did not declare "categorically" her intention to step down 
in 2010, noting with suspicion that the President's address sounded 
more like a campaign speech than a SONA.  Ilocos Norte Rep. 
Ferdinand "Bongbong" Marcos II suggested that the economic 
statistics cited by the President were not reflected in actual 
economic conditions.  Senator Francis Escudero, a presidential 
hopeful in the 2010 elections, said that allegations of corruption 
"may very well be the darkest legacy of the Arroyo administration's 
nine years in power." 
 
SMALL PROTESTS, LOUD VOICES 
--------------------------- 
 
¶7. (SBU) As a receptive audience inside the Philippine House of 
Representatives cheered and applauded the President's forceful 
delivery, some 7,000 demonstrators led by left-wing organization 
Bagong Alyansang Makabayan (Bayan) -- a small protest by Philippine 
standards -- conducted a peaceful protest to oppose what they 
regarded as President Arroyo's political maneuvers to perpetuate her 
tenure (ref B).  The marching protesters represented a cross-section 
of society and included well-known figures such as Senator Manuel 
Roxas, another 2010 presidential contender, who in a speech earlier 
that day railed against the Arroyo administration.  Held near the 
legislative complex, the protest culminated with the burning of an 
effigy of the president.  The demonstration, though peaceful, was 
marred by the beating of alleged intelligence agents by protesters 
who accused them of infiltration.  Simultaneous rallies were held in 
Aklan, Bacolod, Bohol, Butuan, Cagayan de Oro, Capiz, Cebu, Davao, 
Digos, Iloilo, Naga, and Tacloban. 
 
COMMENT 
------- 
 
¶8. (SBU) President Arroyo's supporters characterized her speech as a 
spirited defense of her strong economic record, while her detractors 
highlighted the speech's omissions and the continued harsh effects 
of the global financial crisis on average Filipinos.  On the most 
contentious issue, Arroyo's alleged desire to stay in power through 
constitutional revision, her critics' fears are unlikely to be 
assuaged; they remember Arroyo's 2003 announcement that she would 
not run for president in the 2004 elections, which she ultimately 
did.  While Arroyo claimed in the SONA that she "never expressed the 
desire to extend" her term -- her clearest statement yet that she 
intends to step down as president -- her harshest critics appear 
prepared to perpetuate the idea that she will cling to office beyond 
her term.  This reaction all but ensures that President Arroyo will 
continue to be the most convenient political target for opposition 
groups and presidential candidates seeking to rally voters during 
the next ten months of campaigning, in the lead-up to the May 2010 
elections. 
 
BASSETT