HONG KONG, June 21, 2005
(STAR) By Paolo Romero and Aurea Calica - President Arroyo broke her silence yesterday on purported wiretapped conversations, but only to insist that she won the elections last year without fraud, and to say that she would comment on the controversy "at the appropriate time."

"I was the winner. I did not cheat," the President told a gathering of businessmen in Hong Kong yesterday as fresh allegations that she participated in fraud during last year’s presidential election continued to hound her.

On a visit to Hong Kong to meet investors, Mrs. Arroyo said she would directly confront in due time the mounting calls for her to confirm or deny that she and an election official conspired to rig the polls, which she won by a margin of about a million.

"With regards to these (allegations), those have to be addressed but not at this time of heavy political turmoil and heavy political situation," she told businessmen at a luncheon held in her honor.

It was the first time that Mrs. Arroyo gave any indication that she would confront the public furor over her purported wiretapped conversations with an election official about fixing the results of the May 2004 elections.

The President said she had flown to Hong Kong for a hastily arranged meeting to impress on investors there that the Philippines was not in the throes of collapse and remains a good investment destination despite opposition moves at home to unseat her.

She refused to be drawn into speculations on whether she rigged last year’s election. "I will make the appropriate statements on the issues at the appropriate time," she told reporters. "But it is not the appropriate time... when there is extensive speculation."

The uproar around the tapes precipitated fears of yet another coup attempt in the volatile Philippines and caused the country’s capital markets to falter.

The controversy was compounded by allegations that her husband, son and brother-in-law accepted protection money from illegal gambling bosses.

Economists warned renewed political uncertainty had also forced many overseas investors to shun the country.

Mrs. Arroyo trumpeted Fitch ratings agency’s recent upgrade of its outlook on the Philippines and touted the recent passage through Congress of a tax rise she hoped would provide cash for much-needed poverty alleviation projects.

"It is no coincidence that our opponents came out within days of the completion of the first phase of our economic plan and within hours of the upgrade in our credit rating outlook," she said.

"It’s an age-old game in the Philippines of keeping the nation divided for this scrappy politics to work," she said, adding she would not be intimidated by the scandal.

At a luncheon hosted in her honor by consumer goods trading tycoon Victor Fung, Mrs. Arroyo outlined her administration’s progress in implementing reforms aimed at revitalizing the Philippines’ struggling economy.

"I believe the Philippines is the best investment area in Asia, if not the world. I am determined to convince international investors of this point," she told businessmen.

At the luncheon were representatives from several leading companies in Hong Kong, including Hopewell Holdings, Jardine Matheson Holdings Ltd., HSBC Holdings and Swire Pacific Ltd.

Finance Secretary Cesar Purisima, who was with Mrs. Arroyo’s delegation, said it was the "crème de la crème of the local business community."

Fung said Mrs. Arroyo’s visit gave them an "important opportunity to hear President Arroyo’s progress in delivering important reforms which have put the Philippines firmly on a path to economic stability and growth."

Stuart Gulliver, one of Mrs. Arroyo’s international business advisers, said the President had outlined a "range of exciting opportunities for international investment in key growth sectors in the Philippines. The President’s plans for continuing reforms will be critical to maintaining the momentum in foreign investment."

Mrs. Arroyo explained that the additional revenue generated by reforms will improve the government’s fiscal standing, and fund increased investments in infrastructure, education and other initiatives to reduce wrenching poverty in the country.

Purisima said Hong Kong’s business leaders recognized the Philippines’ economic progress but these are being offset by the allegations hounding the President.

"They (business leaders) were also unanimous in the view that the political noise coming out of the Philippines is overshadowing awareness of the very real economic achievements that have been made," he said.

Purisima said the business leaders saw there were a lot of investment opportunities in the country but were concerned about the political environment. "We told them that their concerns are being addressed and you have never seen any President who invested so much political capital for these reforms."

Mrs. Arroyo made it clear to them, Purisima said, that underneath the political fog are golden opportunities for business and investment.

Also yesterday, Mrs. Arroyo met with Tony Kwok, the former head of Hong Kong’s Independent Commission Against Corruption and now her anti-corruption adviser, to hear a status report on developments in the government’s drive against graft.

Kwok has begun a European-funded project to fight corruption in 16 key government offices in the Philippines.

Mrs. Arroyo also had lengthy interviews with the foreign press to show that the Philippines still has promise despite the intensifying bickering between her administration and the political opposition allied with former President Joseph Estrada.

"These media sessions will help carry the message of the new investment environment in the Philippines to the financial and business communities around the world," Press Secretary Ignacio Bunye said.

Mrs. Arroyo’s Hong Kong trip is one of several to major Asian financial and business hubs. She will also make investment promotion trips to Singapore and Japan, but no dates have been announced.


Mrs. Arroyo left early yesterday morning and got a warm sendoff from her Cabinet men, led by Vice President Noli de Castro, who showed up in full force at Villamor Air Base in Pasay City, where the President’s plane took off.

She was accompanied by Trade Secretary Juan Santos and Bangko Sentral ng Pilipinas governor Amando Tetangco aside from Purisima and Bunye.

But Mrs. Arroyo was not entirely welcome in the former British colony.

Filipino labor activists and workers protested her one-day visit due to allegations swirling back home.

About 30 demonstrators stood outside her hotel, shouting slogans and holding up small white signs that said, "Out with Graft! Out with Gloria!"

Some of the protesters insisted that Mrs. Arroyo was trying to flee the political storm and firm up her power.

"What she’s trying to do is convince the business community she’s still in control of the country," said Aaron Ceradoy, an activist for the Asia Pacific Mission for Migrants, which he said advocates for migrant workers.

Protester Goody Cadaoas believed the election fraud allegations. "She’s a cheater. That’s her voice 100 percent, no doubt."

Cadaoas, a housekeeper, said that Mrs. Arroyo’s meetings with Hong Kong business leaders would be unsuccessful. "I don’t think these businesspeople will believe her because she’s a liar."

Eman Villanueva, a migrant activist with United Filipinos in Hong Kong, said Mrs. Arroyo’s investment-seeking visit was badly timed because the recent political instability would scare away potential investors.

He also thought Arroyo had other motives. "I think her trip this time is to escape the heat."

Millions of Filipinos — mostly domestic helpers — work around the world, and they have become a new political force since they got the right to vote in the 2004 presidential election. Nearly 89,000 workers in Hong Kong registered to vote.

Filipinos fear the intensified bickering between the Arroyo administration and the opposition might hurt efforts to get the country’s economy back on its feet.

Purisima earlier expressed confidence, however, that investors and traders will "see through the noise" created by allegations against Mrs. Arroyo and her family. — With AP, AFP, Rainier Allan Ronda

Reported by: Sol Jose Vanzi

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