JANUARY 10, 2007 (STAR) By Aurea Calica - Malacañang admitted yesterday the midterm May elections would be a "referendum" on President Arroyo and said it was taking on the challenge on the basis of the Chief Executive’s performance.

The opposition and other administration critics said the people’s disapproval of Mrs. Arroyo would reflect in the coming elections with the defeat of her candidates.

"The opposition does not have to belabor the obvious. The administration accepts the challenge on the basis of the performance of the President, who is the only leader in recent history who has decisively turned the economy around in record time, has dented poverty, has taken a strong stand against terror alongside our global allies, has paved the way for permanent peace in Mindanao and is on the way to modernizing the armed forces," Press Secretary Ignacio Bunye said in a statement.

"President Arroyo has put the Philippines on the world map in a way that mirrors good governance despite political noise. We challenge her detractors to match or surpass this record," Bunye added.

Mrs. Arroyo herself vowed earlier to give the opposition a good fight in the midterm elections citing the qualifications of her candidates as well as the performance of her administration.

She stressed she would not be distracted from pursuing economic reforms and sustaining growth.

She cited breakthroughs in fiscal management such as the lowering of the budget deficit to P80 billion from P120 billion. She also said the strengthening of the peso and the stock market, as well as the manageable inflation, indicated a better year.

"We’re off to a good start. We’re confident 2007 will be the year it all comes together. More Filipinos are converging their talents and energies in moving the economy through greater heights," Mrs. Arroyo said.

"Even as we face the usual political noise attendant to midterm elections, that won’t threaten at all the established growth curve of the economy," Mrs. Arroyo said.

She maintained that election-related issues would not threaten her administration’s economic gains.

She stressed her politics is focused on "the welfare of the people" and unfazed "by the jabbing and shadow boxing of the other side."

Mrs. Arroyo said her economic team was determined to work harder to meet the government’s macro economic targets for this year.

"Our team is resolved in sustaining our macro and micro targets. We are bent on reducing the number of families living below poverty line without being hampered by the political season," she added.

She said that in the first half of her term, the number of families living below poverty line went down to 24 percent from 28 percent in 2000.

Her allies at the House of Representatives, meanwhile, believe that renewed attempts by the opposition to oust her through impeachment will not take off because pro-administration lawmakers will dominate in the midterm elections.

Antique Rep. Exequiel Javier said the opposition’s plan to control Congress and other local posts would be "unattainable" because Filipino voters were discerning enough to know that they were being manipulated by deposed President Joseph Estrada, who wanted to return to power. — With Delon Porcalla

Chief News Editor: Sol Jose Vanzi

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