Arroyo admits lapse but denies rigging election

MANILA - President Gloria Macapagal Arroyo hasadmitted she talked to a Philippine election official, as detailed in recordings that have prompted calls for her to quit, but insisted she did not influence the vote count.

The opposition, which also accuses members of Arroyo's family of taking kickbacks from illegal gambling syndicates, has seized on the recordings of conversations as proof she cheated her way to a fresh term in May 2004.

Before her televised speech to the nation, analysts had said they wanted Arroyo to offer clarity to investors worried about the impact of political volatility on her fiscal reforms to raise revenues and cut chronic budget deficits.

There is no law to stop candidates from talking to election officials in one of Asia's most vibrant but unruly democracies.

But Arroyo's admission of a "lapse in judgment" and appeal for forgiveness were unlikely to deflect the opposition from seeking her resignation.

"The political tension will remain," said Jose Vistan, analyst at AB Capital Securities in Manila. "This will not be good for the financial markets."

Arroyo said that, anxious to protect her votes, she had called many people, including an official from the commission on elections. She did not name the official but the opposition has said it was election commissioner Virgilio Garcillano.

"My intent was not to influence the outcome of the election and it did not," she said, breaking three weeks of silence over the recordings. "I am sorry. I also regret taking so long to speak before you on this matter."

The recordings appear to show Arroyo pressing the election official for a bigger winning margin. The final tally gave her victory by about 3 per cent of the vote, roughly in line with surveys before the election.

NEED TO SETTLE DOWN

I don't think it's necessarily an end in itself," said Guillermo Luz, executive director of the Makati Business Club and secretary-general of election watchdog NAMFREL. "But it's a huge step forward and people need to settle down."

None of the allegations of election cheating or gambling kickbacks has been proven against Arroyo or her family.

Her spokesman had previously said the recordings were doctored and the government has warned the accusations are part of a plot to undermine and oust Arroyo.

With oil prices soaring above $60 a barrel, Filipinos are anxious over the rising cost of living and an expanded national sales tax due to take effect on July 1.

There have been relatively small protests in recent weeks against Arroyo, whose ratings are the lowest of any Philippine leader since the overthrow of dictator Ferdinand Marcos in 1986.

But analysts have seen no signs yet of the volcanic public anger beneath the "people power" revolts that toppled Marcos and then Joseph Estrada as president in 2001.

The peso, which hit a 5-month low of 55.94 to the dollar last week on perceptions of rising political risk, ended local trade at 55.51 on Monday before Arroyo's speech, stronger than Friday's close at 55.65.

The main stock index ended 0.84 per cent higher on Monday.

A lawyer for Marcos, Oliver Lozano, filed an impeachment complaint against Arroyo on Monday, saying conversations with the election official were immoral and contrary to the constitution.

The complaint can be taken up by the lower house of Congress with the backing of just one law-maker but a motion to impeach Arroyo would require support of one-third of the 235 members.

- REUTERS