the philippines - playing out long conflicts - paul rodell

THE PHILIPPINES: Playing Out Long ConflictsAuthor(s): Paul A. RodellReviewed work(s):Source: Southeast Asian Affairs, (2004), pp. 187-204Published by: Institute of Southeast Asian Studies (ISEAS)Stable URL: http://www.jstor.org/stable/27913260 .Accessed: 22/08/2012 10:11

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Southeast Asian Affairs 2004

THE PHILIPPINES Playing Out Long Conflicts

Paul A. Rodell

After President Gloria Macapagal-Arroyo's surprise announcement that she

would not run for re-election so she could remove herself from the distraction

of politics and be better able to build her "Strong Republic", the first months

of 2003 seemed to pass in relative calm. There was a significant problem with a growing budget deficit, but the government soon initiated a programme that

eased pressure there. More importantly, the political opposition was not united

while favourable legal decisions paved the way for the long-delayed return of

ill-gotten Marcos loot and for the eventual conviction of former president Estrada. Meanwhile, the decades-old insurgency by the Communist Party of

the Philippines (CPP) lost additional credibility with the senseless murder of

former New People's Army (NPA) chief Romulo Kintanar, and a February offensive against the Muslim Islamic Liberation Front (MILF) dealt that armed

rebellion another significant blow.

This relatively upbeat scenario changed in late July when an otherwise

inept rebellion by a few hundred soldiers revealed much deeper problems in

the country's military and the link of some disgruntled junior officers with

prominent members of the political opposition. Suddenly, the government was

on the defensive. Then, in August a number of sensational charges were made

against the President's husband, Jose Miguel "Mike" Arroyo, in a series of

Senate speeches by a leading member of the opposition. In response, and in

the face of declining popularity ratings, the President announced that she

would run for re-election after all. By year's end, candidates had been sorted

out, alliances shifted, and the stage was set for an election year showdown

between a reformist president and a new movie actor-led coalition of Marcos

and Estrada administration stalwarts.

The Oakwood Mutiny Shock

The Oakwood Premier Suites is a high-end hotel/apartment facility in the

heart of the commercial district of Makati, a Manila suburb that services the

Filipino ?lite, international business, and diplomatic communities. In the early

Paul A. Rodell is Associate Professor in the Department of History at Georgia Southern

University.

188 Paul A. Rodell

morning hours of Sunday, 27 July, 296 officers and men from the Armed Forces of the Philippines (AFP) took control of the Oakwood, laid heavy explosive charges to deter a counter-attack, and issued a statement demanding the removal of President Arroyo. The supposed basis of their complaint was

her alleged plan to impose martial law and the government's widespread corruption. The brazen attempted power grab soon lost steam, however, when

expected reinforcements from provincial locations failed to arrive and sup portive crowds led by the Guardians Brotherhood Foundation, a group closely identified with Senator Gregorio "Gringo" Honasan, were prevented from

marching to Makati. As well, the broad mass of Filipinos did not respond to the putschists' allegations, so no supporting crowds of outraged citizens mate rialized. By mid-afternoon heavy rain scattered those few curious spectators who were on hand, the surrounded soldiers began surrendering, and the

leading officers agreed to negotiate. A few minutes before 10 p.m., the Presi dent went on national television to announce the end of the coup, which was

already being called a "mutiny".1 To a casual observer, the Oakwood mutiny might have appeared an ill

conceived and botched affair, but that assessment neglects the fact that the head of the AFP's intelligence service, Brigadier General Victor Corpus, had as early as 10 and 11 July, sent out urgent warnings about a coup attempt that would be launched between late July and mid-August. He further elaborated that the plot would be led by some members of the Philippine Military Acad

emy's (PMA) class of 1995 working in co-operation with Honasan, whose coup exploits extended from the 1986 People Power Revolution to the EDSA 3 Revolt of 1 May 2001. Unfortunately, Corpus' earlier intelligence gaffs had

damaged his credibility and some commanders, especially in the navy, did not take his warnings seriously. However, National Security Adviser Roilo Golez believed Corpus and immediately informed the President. Further intelligence identified the plotters including their leader Army Captain Gerardo Gambala and spokesman Navy Lieutenant Antonio Trillanes. Somehow, the coup plotters fearing discovery, sent coded telephone text messages to their comrades tem

porarily stopping the mobilization. On the 11th, Honasan suddenly announced his intention to run for the presidency so he could claim political harassment should anything go wrong, and two days later Trillanes met with the President to present his concerns.2

In addition to meeting with the presumptuous Navy Lieutenant, the Presi dent did all she could to send a crystal clear message to the aspirant coup leaders that their plans had been discovered. An indication of the govern

ment's awareness of the plot can be seen in the lead headlines of the country's newspapers, which cried out about the government's awareness of the con

spiracy.3 Meanwhile, soldiers arriving in Manila from provincial outposts were

questioned, and on the 24th the President even hosted a dinner for PMA officers from the 1994 and 1995 classes. Why the coup plotters thought they had a chance of succeeding is something that only they can answer. One

The Philippines: Playing Out Long Conflicts 189

surmises that they thought their preparations were so airtight and their sup

porters so important that the government's prior knowledge was irrelevant. In fact, the greater significance of the Oakwood mutiny was its broader

reach. In the end, the soldiers appeared to have been used by powerful indi

viduals and then abandoned. Soon after the revolt ended, it became known

that the plot would have created a fifteen-member interim governing council

headed by Honasan who would rule the country until new elections could be

called under a new form of government. Honasan immediately went into

hiding for thirty-one days until the worst was over, although he still faces a

formal charge of aiding and abetting a coup d'?tat} It was also revealed that a

number of former president Joseph Estrada's family members and close asso

ciates might have played supportive roles in the attempted coup. During and

shortly after the coup, government soldiers raided two houses in the nearby town of Mandaluyong that the coup plotters used as staging areas. The houses

were littered with documents, clothing, banners, and stray ammunition. Ramon

Cardenas, formerly of Estrada's presidential staff, owned one of the houses, while Estrada's mistress, Laarni Enriquez, owned the other. Meanwhile, two

vehicles owned by his wife, Senator Luisa Ejercito-Estrada, were found aban

doned after being used by the rebels. Documents linking the former presi dent's son Jude were found inside one of the vehicles, and receipts found in

the Oakwood rooms used by the rebels were traced to Estrada's other son Jose

"Jinggoy" Estrada.5 While none of Estrada's immediate family was charged because the evidence was not substantive, Cardenas and Enriquez had formal

charges brought against them.

That Estrada might have been tempted to back such a reckless coup is

understandable considering his mounting legal problems. After being forced

from office, Estrada was charged with the crime of plunder, which carries an

ultimate death penalty. The year had not been good for the former president as government prosecutors built a strong case, despite their inability to extra

dite fugitive Estrada cronies such as Dante Tan and Yolanda Ricaforte. Mean

while, Estrada's lawyer, Alan Paguia, could only challenge the constitutionality of his removal from office, a tactic that did not win the sympathy of the

Supreme Court under Chief Justice Hilario Davide. By 19 July, Estrada had

reached a decision not to dignify the court by presenting a defence, but to put the onus on them to deliver a verdict against a man who still considered

himself president.6 Under these circumstances, it is understandable how

Estrada's family and friends might have been willing to take the desperate

gamble of supporting even a badly managed coup. It should be added that July was not a good month for the Marcos family

either. On the 15th, Davide's Supreme Court also ruled that US$683 million

in Swiss bank accounts be returned to the government. Though the family's

lawyers had some further appeals that prolonged the process, the end was in

sight for this seventeen-year-long legal battle.7 The year also saw some of

Imelda Marcos' jewellery auctioned off, an estate in Ferdinand Marcos' home

190 Paul A. Rodell

province was seized, and the Presidential Commission on Good Government

under its crusading director Haydee Yorac was looking into two more possible Marcos bank accounts. Despite the Marcos family legal problems, there was no

link between them and the failed coup plot.

Though the mutineers failed in their primary objective, they still won a

significant propaganda battle against the government. By changing their rhetoric

in the middle of the afternoon from government overthrow to listing griev ances about corruption in the government and military, they gained an

incredible amount of public sympathy. Many of the young soldiers had served

in Mindanao and portrayed their motive as concern for the country. For

example, their stories of having only shoddy equipment to face the better

equipped MILF enemy because senior officers had allegedly sold off new

munitions, rang all too true. They specifically charged Defense Secretary Angelo

Reyes with corruption and Corpus with masterminding a deadly terrorist

bombing at the Davao City airport that was then blamed on the MILF. So

intense was the public reaction to these charges that Corpus resigned a few

days after the bombing and Reyes stepped down somewhat later. Both men

resigned to deflect criticism that the President would otherwise have to bear.

In addition, speculation that another coup might still occur kept Metro Manila on edge for many months thereafter. The capital's citizens knew that many soldiers had been prevented from joining in the Oakwood mutiny and that

they might plot future insurrections. A number of government officials and

military officers tried to assure the public that the crisis had passed, but even

AFP Chief of Staff, General Narciso Abaya, had to admit that a repeat was a

"cause for concern".8

The President Changes Her Mind

The fascinating thing about Philippine politics is that it never turns out as

observers and practitioners think it will. On 30 December 2002 the President

surprised the nation with her announcement that she would not run for

re-election. In her Rizal Day speech Arroyo decried her nation's divisive political life and listed the goals that she would work for during the remainder of her

term: attend to the nation's economy, heal the deep divisions in Philippine

society, and work for clean and honest elections in 2004.9 By October 2003, one did not need insider knowledge to know that President Arroyo was going to change her mind and run for re-election. Her formal announcement on

the fourth that she would run for the presidency was met with indifference, at least by the people I met and observed in Metro Manila.10

So why did the President change her mind? In her 4 October speech she

claimed that "our enemies" were fearful of the government's success during the first half of 2003. Hence, they "resorted to their Machiavellian schemes"

such as the Oakwood mutiny and black propaganda to weaken the nation so

they could grab monopolistic power through "guns and gold, drugs and dregs". She then offered to sacrifice her "yearnings for personal quiet and release


from presidential strain and anxiety" and stand for re-election as a candidate

with experience. Her initial December 2002 announcement that she would not run was generally greeted with praise and in early 2003 her public opinion

ratings increased and the legislature was somewhat compliant. However, her

contention in October that her decision to run was motivated by events that

took place in July and August ignored earlier indications that she was already

changing her mind.

As early as May, it became apparent that someone was carrying out a

careful campaign of supposed endorsements from world leaders such as U.S.

President George W. Bush and Malaysia's Prime Minister Mohamad Mahathir

and local luminaries such as Manila Archbishop Cardinal Jaime Sin. The prob lem with the campaign was that all three of these supposed endorsements were

later denied by the individuals themselves or through their spokesmen. At the same time, some of the President's political confidants were quite open about

their belief that the President would change her mind. One of these confi

dants was Lakas party spokesperson Heherson Alvarez whose enthusiasm for a

2004 Arroyo re-election campaign indicated that the President's mind was

shifting. In a June interview, "Mike" Arroyo seemed to indicate that his wife's

decision was not irreversible, and suddenly posters began to appear urging her to run.11

Ultimately, however, two events seem to have played the greatest role in

determining the President's final decision: the Oakwood mutiny and Senator

Panfilo Lacson's attacks on her husband's integrity. While the mutiny is covered

above, the subtext of the failed coup was that oppositionist politicians and young

military officers were willing and capable of using violence to overthrow the

established government and would stop at nothing. Among the confiscated

weapons taken from the mutineers was at least one high-powered rifle with a

night vision sighting scope. There were later reports that one of the objectives of a wider conspiracy might have been the assassination of the President.

But more damaging than the inept coup attempt were the attacks on

"Mike" Arroyo's integrity that Lacson aired in Senate speeches on 18 August and 1 September. Lacson is a declared candidate in the 2004 presidential race

and the former head of the Philippine National Police who had been

appointed by his friend Joseph Estrada. Lacson's own past is highly controversial

and he has a number of legal actions pending against him in both the Phil

ippines and the United States. Lacson's PowerPoint expose, entitled "The

Incredible Hulk", intended to mock "Mike" Arroyo's weight, made many alle

gations, including an insinuation that he had an affair with his female

accountant. However, most of his allegations claimed that for years the First

Gentleman was laundering illegally acquired money and unused campaign contributions through a variety of secret bank accounts using the pseudonym of Jose Pidal.

It was not long before Lacson's campaign began to come apart. First, his

fellow senators pressed him for documentary evidence such as collaborating

192 Paul A. Rodell

eyewitness testimonies, and original documents rather than faded photocopies to support his charges. In partial response, Lacson produced Eugenio Mahusay,

Jr., Arroyo's godson and former employee, but his star witness was "rescued"

from the senator's "safe house" a day later and completely recanted his testi

mony. Meanwhile, opposition Senator Aquilino Pimentel, Jr. told reporters that he had been approached by a "group of people" with this same "evidence" ten months earlier, but rejected the group's entreaties as their evidence was

weak. Later, Mike Arroyo's brother Ignacio stepped forward to say that he

opened two accounts in the Jose Pidal pseudonym, but invoked his right to

privacy when pressed for details. He did, however, claim that these were old accounts and were closed a long time ago. By mid-September two of the banks

confirmed Ignacio Arroyo's statement that the Jose Pidal accounts were closed

due to inactivity in 2000 and 2001. Meanwhile, another seven banks issued

statements denying that they ever had such accounts.12 When Lacson was sched

uled to deliver his third Senate speech he failed to appear. The explanation was that he left the country for Australia and Florida, supposedly to gather more "evidence".

The most important result of Lacson's dubious allegations was the frenzy of political charges and counter-charges that followed which included the

dragging up of irrelevant issues such as Arroyo's ownership of real estate in

San Francisco, California, his family tree, who his friends are, and so forth. In

fact, it was clear that the real objective of Lacson's campaign was to besmirch

the President by attacking her husband. In September this strategy seemed to

be working, despite the specious nature of the charges, and the President's

approval rating steadily declined under the onslaught of Lacson's unsubstan tiated allegations.13 Through most of the political circus President Arroyo kept silent, but after her announcement of presidential candidacy she issued a

public warning telling Lacson that he had "gone far enough" in his attempts to sow "malicious intrigue designed to strain marital and family relations".14

The "Opposition" and the Emergence of Another Actor

The President's 4 October announcement not only clarified her position; it

challenged her opposition to pick a frontrunner and this turned out to be

difficult. Long before October, two of the President's opponents, Senator Lacson

and former Secretary of Education Raul Roco, had already declared their

candidacies even as business magnate Eduardo "Danding" Cojuangco and movie

actor-producer Fernando Poe, Jr., known by his initials FPJ, were being actively courted. Despite taking a long time to mount an effective and united cam

paign behind a single candidate, the "opposition" remained seriously divided

until very late in the year.15 Only at the eleventh hour did FPJ accept the

nomination of a coalition that, in very large part, combined many powerful

figures from the Marcos and Estrada administrations.

While Lacson did not officially declare his intention until late March, his

real campaign began much earlier and at first many dismissed his candidacy


as a thinly veiled attempt to avoid prosecution in a number of criminal cases.

While Lacson began his career in the Philippine National Police during the

Marcos regime when he served under well-known human rights violators, he came into his own in 1992 in the Estrada administration when he headed a

task force of the Presidential Anti-Crime Commission (PACC). In two-and-a

half years, Lacson's task force agents were implicated in the suspicious killings of forty criminal suspects. The most spectacular incident was the killing of

eleven members of the Kuratong Baleleng gang along a remote cogon grass covered stretch of Commonwealth Avenue in May 1995. The gang members

had been picked up in a series of raids investigating the robbery of an armoured van near the Manila airport that netted an estimated 50 million pesos. All the

victims were found the day after their arrest with gunshot wounds to the head

and two additional victims were later discovered in other Metro Manila loca

tions. No PACC officers were hurt in any action and the money was never

recovered.16

Lacson's role in the events of May 1995 has never been resolved and many of his former subordinates have either fled Philippine jurisdiction or recanted

their testimony against him after supposedly receiving substantial cash pay ments. Although opposition senators blocked the release of the findings of a

special investigative committee, Lacson had more difficulty with the Supreme Court, which ordered a reopening of the cases in September. At almost the same time, a U.S. court case against Lacson over payment for an order of

handcuffs for Philippine policemen finally established that he and his wife had

substantial funds in bank accounts in that country.17 This discovery seemed to

lend credence to earlier allegations made by Victor Corpus that he might have

enriched himself in narcotics trafficking while with the PACC. In the face of

his worsening legal future, Lacson staked out a tough "law and order" position in presidential campaign speeches and he has continually maintained that his

desire to be president is sincere.18 Still, Lacson's legal problems made him

such a political pariah that he could not convince his fellow oppositionists that

he is a viable candidate. As well, former president Joseph Estrada had made no secret that he wanted his friend, movie actor and producer Fernando Poe,

Jr. to run. Even after Poe declared his candidacy, however, Lacson still pursued his campaign. While Lacson's dogged determination is admirable, most observers

believe that his real function, if he stays in the race until the May election, will

be to take votes away from Poe.

On the other hand, for much of 2003, Raul Roco looked like a very strong candidate. Earlier, in mid-August 2002, Roco dramatically resigned his cabinet

position when the President allowed an investigation of a minor corruption

complaint filed against him by disgruntled department employees to proceed. From that point until Poe's formal candidacy, Roco consistently topped public

opinion polls bolstered by his considerable support among the country's youth,

intelligentsia, and middle class. Pragmatic politicians, nevertheless, discount

Roco's chances since his national drawing power is uncertain and he has done

194 Paul A. Rodell

virtually nothing to build a national party structure. Only by mid-October

did two very small political parties come out in support of Roco's bid and by the end of the year, Roco was having difficulty raising a senatorial slate to

run with him and he chose Herminio Aquino, a virtual unknown, for his

vice-presidential running mate.19 Still, Roco is determined to run for the

presidency and he, too, is seen as a "spoiler" who could hurt the President's

chances of winning re-election since she needs precisely those voters most

likely to vote for him.

For much of the year, many opposition members hoped for a presidential bid by Danding Cojuangco who is the political and financial power behind the

National People's Coalition (NPC) whose members constitute the second largest bloc in the House. Cojuangco had run for the presidency in the past, but

faired poorly in the balloting. Instead of having a personal desire to hold

public office, Cojuangco is best known as a "king maker" who wants to control

the country's political process so as to protect his economic empire which has

become increasingly threatened. Cojuangco made his fortune during the Marcos

years when he diverted tax funds from coconut farmers into a bank he con

trolled and then used that money to purchase the San Miguel Corporation and other businesses. Legal actions to retrieve the wealth have been pending since the fall of Marcos, but only in 2001 did the Supreme Court under Chief

Justice Hilario Davide finally rule that the "coco funds" were public and could

not be used by a private individual. In July 2003 the country's special graft court ordered the sequestering of the bank's shares for all corporations it

controlled.20

With court decisions closing off legal options, Cojuangco seriously considered a run for the presidency despite his unsuccessful past effort. He appeared to

have decided against running once President Arroyo announced her re-election

bid, choosing instead to strike out against Davide, his Supreme Court nemesis.

On 24 October, the day after a House of Representative's committee dismissed an impeachment complaint against Davide filed by former president Estrada,

Cojuangco's nephew, NPC party head Representative Gilbert Teodoro, submitted a new impeachment complaint against the Chief Justice. The new

complaint charged Davide with financial malfeasance and was signed by eighty one representatives, five more than needed for it to be forwarded to the

Senate. This bold move not only endangered Davide; it also threatened the

judiciary's independence, House Speaker Jose de Venecia's hold on power, and the Arroyo government's stability. The NPC leadership made a fatal error,

however, when they overlooked a legal provision that allows the filing of only one article of impeachment against a government official in a year. After a

chaotic two weeks, the Supreme Court declared the second impeachment

complaint unconstitutional and de Venecia mustered a majority in the House

to turn back a final NPC attempt to keep the issue alive.21 By the end of the

year, Cojuangco's grip on power was weakened but not broken. At least for the

moment, he does not want to antagonize the President, but if she fails to win


re-election and the NPC remains strong, Cojuangco may well pressure the

government again to kill the court cases that threaten to strip him of his

Marcos era wealth.

With Cojuangco out of the race and the NPC-inspired impeachment of

Davide a failure, the opposition turned to Fernando Poe, Jr. In addition to the

ongoing efforts of Joseph Estrada to convince his friend to run, Senators

Edgardo Angara and Vicente Sotto III extended their support for a presiden tial bid. They and Estrada even tried, unsuccessfully, to arrange an accommo

dation between Lacson and Poe. Finally, on 22 December a seemingly reluc tant Poe accepted a draft offered by a coalition of opposition parties that had

met earlier on the 10th.22

While many Philippine film and television personalities have made new

careers in politics over the past decade, none have been less qualified for their

positions than Poe. WTiile Estrada was a mayor, senator, and vice-president before becoming president, FPJ has no experience whatsoever. So, why is he

running and why would the opposition want him? Thus far, Poe has only given

speeches filled with platitudes and no substance, so it is clear that he has no

personal agenda or vision for the country. Rather, he seems to be running at the

urging (pleading) of his friend Joseph Estrada, who he is expected to pardon after winning office. Meanwhile, the opposition is happy with FPJ because his

mythic on-screen persona will capture many votes, perhaps more than Estrada

got in 1998. In addition to the possibility of electoral victory, it is very likely that some opposition leaders think they can control Poe and make his victory their own comeback to power. Shortly after accepting the opposition's draft, Poe

stood with his twelve senatorial running mates, half of whom were Marcos and

Estrada era stalwarts. Representing the Marcos era are Juan Ponce Enrile, Francisco Tatad, and Imee Marcos while the Estrada era senatorial candidates

include Jose "Jinggoy" Estrada, Ernesto Maceda, and Jamby Madrigal. In addi

tion, among those helping to run the Poe campaign are friends of Cojuangco as well as Senators Honasan and Teresita Aquino-Oreta.

The 2004 presidential election may, in effect, be a long-delayed showdown

between the Marcos era ?lite and modern Philippine middle-class reformism, the likes of which broke out in 1986 to topple the Marcos government and,

again, in 2001 to overthrow Estrada. The worry for contemporary reformers

is that Gloria Macapagal-Arroyo is no Cory Aquino and does not exactly com

mand the full respect of the Filipino people. WTiile it is a long way between

January and the voting in May, Poe's popularity is genuine and he topped all

surveys as soon as he announced his candidacy.

The Economy: Averting Crisis by Postponement The wonder of the Philippine's economy is that it somehow managed to

maintain itself in another turbulent year and even made some modest gains. On the international front, the lagging U.S. economy, possible disruptions of

critical imported oil supplies resulting from the Iraq war, and the threat of the

196 Paul A. Rodell

SARS virus could have caused more damage than they did. Domestically, an

early yawning budget deficit, the Oakwood mutiny, charges of corruption against the First Gentleman, resignations of key government officials, and general law

and order concerns might have dissuaded foreign investors. These were huge

challenges to overcome.

The year began with most indices appearing healthy. Inflation was at an

historic low of 2 to 3 per cent, gross domestic product (GDP) was expected to

easily hit a 4.5 per cent, export volumes were acceptable, and the current

account status still in surplus. Despite these good signs, an early poll by Gallup International showed that Filipinos were second only to the Japanese in their

economic pessimism for the coming year.23 At least part of their concern was

a growing government deficit that began in mid-2002 and seemed to become

unmanageable. By early 2003, the original projected deficit of 130 billion

pesos had already been exceeded by 71 per cent. In response, international

rating agencies downgraded the Philippine's status, which meant that future

international bond issues would have higher premiums and would, in turn,

endanger the level that the government could spend on critical capital spend

ing programmes for long-term development. While excessive spending was

partly to blame, the real problem lay in the country's abysmal tax collection

rate that had declined from 17 per cent of GDP in 1997 to 13.5 per cent by the end of President Arroyo's first year. The problem had three dimensions,

corruption in the Bureau of Internal Revenue (BIR), private interests that

resisted new taxes and the ending of lucrative tax incentives, and a Congress

unwilling to impose new taxes.24

When the President made her dramatic December 2002 announcement

that she would not run for re-election, the state of the economy was one of her

principal concerns. By the following month, this concern was translated into a no-nonsense programme of increased tax collection as well as reductions in

government spending. Responding to strong pressure, the BIR undertook a

series of surprise inspections of businesses in Metro Manila that revealed

unanticipated levels of cheating. The new "get tough" policy also led to a

dramatic increase in collection rates of 11 to 30 per cent. Soon after, the

budget deficit slowed and began to reverse itself, partially making up for

earlier losses.25 Complementing the tax collection campaign was the modest

804 million peso budget that the President signed into law in late April and

that increased spending by only 2.9 per cent.26 With revenues up and expen ditures under control, the economy began to expand except for exports, which were hampered by slowdowns in the economies of the major trading partners. While expecting the economy to expand at 4 per cent in the second half of

the year, there were concerns that slowdowns in development expenditures, the failure to pass new tax legislation, and heavy expenditures for debt serv

icing would lead to weak growth in the longer term.27

By mid-July the economy still looked healthy despite the Iraq war, SARS, the budget deficit, and the U.S. economic slowdown. This positive assessment


seemed endangered in the political aftermath of the Oakwood mutiny as both

the stock market and the peso reacted with steep declines. Meanwhile, in

August the Court of Appeals suspended central bank Governor Rafael

Buenaventura and four senior deputies for denying due process to a bank that

they ordered closed. These events were especially worrisome for investors

genuinely concerned about the influence of Philippine political and judicial

meddling in business. The courts had interfered with investors from Singa pore in 2001, Malaysia in 1997, Taiwan in 1990, and in May the Supreme Court upheld the President's voiding of the contract for the newly built Ninoy

Aquino International Airport (NAIA) terminal. As a result of the NAJA

decision, Fraport A.G. of Germany and the Cheng family of Manila were left

with huge losses and they threatened to appeal to the World Trade Organiza tion.28 Long-term investors will think twice before placing their money in the

Philippines. Another blow struck public and investor confidence in December when

the respected finance secretary Jose Isidro Camacho resigned. It seemed that

he had planned on bowing out of government earlier, but stayed longer because of the July coup. In a speech before the Philippine Economic Society, Camacho described the Philippines as being in a "fiscal crisis" because of the

loss of international confidence in the country's ability to manage its finances

and the failure of Congress to pass reform and tax legislation. His words

echoed Senator Ralph Recto's warnings in August about the national debt that

stood at 3.258 trillion pesos and those of Economic Planning Secretary Romulo

Neri who blamed special interest groups as being behind the congressional malaise.29 Despite these dire warnings, the Asian Development Bank is projecting a 4.5 per cent growth rate for 2004, given the present indices and the expected infusion of upwards of 30 billion pesos into the economy during the election

campaign season.30 In the mean time, the Philippine economy putters along even as debts accumulate and a significant portion of its people remains in

abject poverty.

The Continued Tragedy of the Philippine Left

The Philippines has the dubious distinction of having one of the longest com

munist insurgencies in the world. From its founding in 1968, the Communist

Party of the Philippines (CPP) and its military arm, the New People's Army (NPA), has gone through a number of shifts and changes of fortune. However, the once idealistic movement that captured the romantic attention of the

nation and its youth has increasingly become ideologically rigid and politically

marginal. In late 2002, a Pulse Asia survey found that over 60 per cent of

Filipinos distrusted the communists and almost 70 per cent wanted peace

negotiations to go forward to end the protracted conflict. WTiat was most

damning for the CPP-NPA was that the levels of popular mistrust were highest

among the urban poor while significant sections of the rural population were

very interested in seeing an end to the insurgency.31

198 Paul A. Rodell

This negative popular perception of the communist movement was deep ened a month later when the popular former NPA chief Romulo "Roily" Kintanar was assassinated by an NPA "hit squad" while having lunch. Kintanar was captured in 1988 and three years later broke ideological ranks from party founder Jose Ma. Sison so there was immediate suspicion that his death was

politically motivated. Kintanar's was not the first such retribution killing. A

year earlier, another prominent CPP dissenter, Filemon Lagman, was killed

and only one day after the Kintanar murder a former NPA provincial com

mander was shot dead in Bulacan province. Days after the Kintanar shooting, CPP spokesperson Gregorio "Ka Roger" Rosal confirmed military assertions

that a specialized NPA unit was responsible and warned other "traitors to the

revolution" that they cannot escape.32 More than any other recent event, the

brutal Kintanar murder galvanized popular sentiment against the ageing rebel

movement as the President reconfirmed her commitment to keep the CPP

NPA on the world's list of terrorist organizations. At the same time, the govern ment offered the communists a new and extensive peace accord in an effort

to jump-start the failed peace negotiations.33

Despite its loss of respect and credibility, the communist movement

remains strong in a number of areas and its military wing is still a formidable

adversary in some localities. That the movement still thrives is, however, more

a testament to the country's poverty level and the poor's sense of hopelessness than it is of the party's ideological vitality.34 The poor often see the NPA as a

means of livelihood, however hazardous, and as a way to seek revenge against the perceived "class enemies". But, because the party is now on international

terrorist lists, its overseas assets have been frozen, leaving the domestic move

ment increasingly cash-strapped. As a result, local cadres have placed emphasis on the collection of "revolutionary taxes" which further isolates them from the

"masses".35 In effect, the CPP-NPA is becoming like the old 1960s Huks who

lived off protection money from the bars and brothels surrounding the former

U.S. military facility Clark Air Force Base in Pampanga province. Extortion now seems to be a greater motivating force than its ideological goal of over

throwing the government. Even living off the political status quo is increas

ingly critical for the CPP-NPA because the election process has become one of

the main sources of the movement's "revolutionary taxes". In election years, local CPP-NPA branches collect fees allowing politicians to campaign in the areas they control. In 2001, according to a local party spokesperson, about 40

million pesos were collected in Mindanao alone.36

A second reason for the communist movement's survival is that more

pressing priorities including the intransigent Muslim insurgency and

destabilization plots such as the Oakwood mutiny have forced the military to

focus its attention elsewhere, thereby putting the CPP-NPA on the proverbial "back-burner". Unfortunately, when the military does pursue leftists, its methods are frequently so heavy-handed they do more to alienate than win over, which

leads to another reason the movement continues to survive. A prime example


of egregious military behaviour occurred in Oriental Mindoro province in

April when five human rights activists were kidnapped and two slain. The

abductors identified themselves as "anti-communist" vigilantes, but local

residents and human rights workers pointed an accusing finger at an army colonel in charge of a battalion of soldiers sent to the province to interdict the

NPA. Although President Arroyo created a special fact-finding commission

headed by Justice Undersecretary Jose Calida to look into the case, its inves

tigation got nowhere. The suspected colonel was transferred to a new assign ment, critical physical evidence was withheld and destroyed, commissioners

received death threats, and enlisted men disappeared.37 By year's end, it became

clear that the investigation had been successfully "stonewalled". If a presidential commission headed by a prominent justice under-secretary cannot investigate

allegations of military abuse, what can a poor Filipino do? Join the New People's

Army, perhaps. Still, by the end of the year, the military's anti-CPP-NPA campaign had

prospered enough that a military spokesperson could give a positive report that the enemy had declined in numbers of members, guns, and "guerrilla fronts". Still, Manila's newspapers were filled with stories about NPA engage ments and the killings in 2003, which added to the estimated 43,000 lives that

had been lost to the insurgency, from 1969 to 2002.38 Even the government

acknowledges that the NPA remains a potent force in many areas and can

strike its victims with near impunity. Meanwhile, the peace talks that were

suspended in July 2001 have yet to reconvene. A number of Philippine govern ment officials, prominent political leaders such as House Speaker Jose de

Venecia and third-party nations including Norway, have attempted to bring the

communists back to the negotiating table, but Sison, speaking from exile in

the Netherlands, has rebuffed all overtures with faded slogans from an earlier

era.39 And so, the CPP-NPA and its ageing Netherlands-based leader finished their thirty-fifth year without getting any closer to imposing their outmoded

political-economic ideology on the Philippines.

Mindanao: Domestic Insurgency and International Terrorism

On 12 October, Fathur Rohman Al-Ghozi, an agent of the Indonesian Jemaah

Islamiyah (JI) was gunned down by soldiers while making his way to General

Santos City, South Cotabato.40 Earlier, on 10 July, Al-Ghozi and two Abu Sayyaf members made an easy escape from the Philippine National Police's (PNP)

Camp Crame headquarters in Quezon City thanks to cell locks that did not

work and scandalously inattentive guards. Their escape was an egregious embarrassment to the government of President Arroyo and sparked a massive

manhunt that involved sixty-seven PNP tracker teams.41 After his escape Al-Ghozi fled to Mindanao where he was given refuge by a local MILF com

mander, Salip Aloy Alsree, at camp Salam Alfarise in Sultan Naga Dimaporo, Lanao del Norte. This protection was extended despite orders from the MILF's

top leaders who were anxious to demonstrate to the government that they

200 Paul A. Rodell

were not harbouring terrorists for fear of jeopardizing future peace talks.42

The MILF's previous lack of control over its troops and field officers had

become worse after the death of the movement's founder Salamat Hashim.

Not only did the escape call into question the Philippine military's ability to conduct basic and sustained anti-terrorist and policing operations, it also

became grist for the political mill. Ramon Magsaysay, Jr., chair of the Senate

Committee on National Defense and Security, called for the resignation of

PNP Director General Hermogenes Ebdane, Jr., who suggested in his defence

that "politics" within the PNP may have played a role in the affair. Charges of

inter-agency rivalry escalated when Director Eduardo Matillano of the PNP's

Criminal Investigation and Detection Group caught two navy officers spying on him who, he alleged, were part of a destabilization plot.43 Finally, the Presi

dent undercut the political wrangling by appointing a fact-finding commission

that later recommended the prosecution of seven PNP officers for negligence and the filing of charges against three inmates for their roles in assisting the

escape.44 The 10 July escape was especially galling for the Philippine government

because of President Arroyo's strong support for the American-led war on

terrorism. In early 2003, she ordered an offensive into MILF areas ostensibly to pursue members of the notorious Pentagon kidnapping gang. The February offensive shattered an existing cease-fire agreement and resulted in the fall of

the MILF's Buliok Complex that covered parts of North Cotabato and

Maguindanao provinces. The MILF responded with a series of bombings in

February and March of Mindanao's power lines, and Davao City's airport and public wharf, killing twenty-one innocent people and wounding over 130 others. These were followed by attacks on the towns of Maigo, Lanao del Norte on 26 April, and Siocon, Zamboanga del Norte on 4 May. However, the

counter-attacks at least gained the government's sympathy in the international

community as both the Organization of Islamic Conference (OIC) and Malaysia were greatly upset with the MILF's behaviour.45

Unfortunately, it became increasingly clear that the MILF's military strength was aided by the Philippine Navy's weak monitoring capability, which allowed

the easy import of weapons and corruption within the AFP that found consid

erable firepower being sold to the insurgents.46 The most recent charges came

from two very different and unlikely sources. In her memoir about her year

long kidnapping by the Abu Sayyaf, Gracia Burnham, related that on more

than one occasion the terrorists would call a certain "Ma'am Blanco" to order

munitions that came from the military's stockpile. Meanwhile, the young officers who led the Oakwood mutiny made specific allegations about the

selling of misappropriated arms by senior officers.47

The Al-Ghozi case also confirmed links between the MILF and the JI, the

Indonesian terrorist organization. In the mid-1990s thejl co-founder Abdullah

Sungkar used his friendship with Salamat Hashim to set up a training facility known as Camp Hudaibiyah that occupied a remote corner of the MILF's


Abubakar complex. In early 2000, President Joseph Estrada ordered military action against the MILF and by July the Philippine Army's gains included

Camp Abubakar. The JI then shifted some of its training back to Indonesia, but still continued training in Mindanao in two small camps not affected by the Philippine military's advance.48

The extent of international terrorist activity was further underscored on

2 October, ten days before Al-Ghozi met his end, when another JI member was

taken into AFP custody in Cotabato City. Taufik Refke, alias Abu Obaidah, was

the JFs number two man in its Philippine operations and his arrest has

reportedly proven to be a bonanza for intelligence officers. His revelations led

authorities to a JI safe house and confirmed that the Indonesian extremist

group continued a small training programme in two camps, Jabal Quba and

Hudiebiyah, after the government's 2000 offensive. Refke's capture also induced a flight back to Indonesia of some JI members although as many as thirty or

so of the extremists might have remained in Mindanao.49

Philippine civilian and military officials have renewed calls for the MILF

to reject foreign terrorists, but many MILF officials seem to believe they need

links with foreign Muslim groups and Middle Eastern governments for the

help they offer. An unnamed "political chief was quoted as saying, "that doesn't mean we are interested in ... fighting their fights".50 So it would seem that the

MILF remains focused on their domestic conflict with the Philippine govern ment and are not interested in an international war against the West. However,

Philippine government leaders believe that there is a power struggle between

pro-negotiation MILF pragmatists and hardliners who would continue armed

resistance. Despite hopes that negotiations with the rebels would begin soon, the year ended with the start of formal talks as elusive as ever.

Notes

1. Manny Mogato, "Powertrip", Newsbreak, 18 August 2003, pp. 17-20. 2. Marites Da?guilan Vitug, "The Race for Time", Newsbreak, 1 September 2003,

pp. 9-11.

3. The headlines of the Philippine Daily Inquirer for three successive days, 18-20 July, read: "GMA Acts to Quell Restive Young AFP Officers", "Ex-Coup Leader Senator an Advisor to Restive Officers", and "Reyes Warns Agitators of Restive Young Soldiers".

4. Key testimony against Honasan by Army Major Perfecto Ragil can be found in his affidavit, Philippine Daily Inquirer on-line version <www.inq7.net> "Full Text of Major's Affidavit vs. Honasan", 5 August 2003. Soon after Ragil's testimony, the chief of the Presidential Security Group presented photographs of Honasan and Trillanes at a meeting of the coup plotters. See Juliet Labog-Javellana, T.J. Burgonio, and Christine O. Avenda?o, "Palace Proof Honasan-Trillanes Photos", Philippine Daily Inquirer on-line version, 14 August 2003.

5. Rufo Aries, "Solving the Puzzle", Newbreak, 15 September 2003, pp. 9-11. 6. Norman Bordadora, "Lawyer Says Estrada Ready for Conviction", Philippine Daily

Inquirer on-line version, 19 July 2003. 7. The court rejected the last appeal on 18 November. See Jovito R. Salonga's account

of the saga of the Swiss bank accounts in his op-ed article, "The Whole Truth

202 Paul A. Rodell

about the $683-M Marcos Swiss Deposits", Philippine Star, 3 October 2003, p. 16, and Philip C. Tubeza, "It's Final: High Court Rules $683 Belongs to Gov't", Philippine Daily Inquirer on-line version, 19 November 2003.

8. See the staff interview of General Narciso Abaya, "This May Not Be the End of It", Newsbreak, 18 August 2003, p. 23.

9. The text of the speech was obtained from http://www.inq7.net/nat/2002/dec/ 31/text/nat_5-l-p.htm.

10. Marichu Villanueva and Ding Cervantes, "

Will Run for President in 2004"', Philippine Star, 5 October 2003, pp. 1 and 12, with the text of the speech on p. 18.

11. Concepci?n Paez, "Run, Gloria, Run", Newsbreak, 10 November 2003, pp. 14-17, especially p. 15.

12. The best summaries of Lacson's campaign are found in two Philippine Daily Inquirer on-line version editorials "Shaky", 22 August, and "Reckless Charade", 5 September 2003. Two other stories from the same on-line newspaper should also be consulted, Christine O. Avenda?o and Michael Lim Ubac, "Former Lacson

Witness Says Revenge Was Motive vs. Arroyo", 3 September and Christine O. Avenda?o, "Arroyo Brother Invokes Right to Privacy, Irks Senators", 9 September 2003.

13. Paez, pp. 16-17.

14. Jaymalin, Mayen, "GMA to Ping: Stop the Malicious Intrigue", Philippine Star, 6 October 2003, p. 5.

15. Amando Doronila, "Still No Viable Opposition Bet for 2004 Polls", Philippine Daily Inquirer on-line version, 10 November 2003.

16. See reports by Gemma Luz Corotan at the Philippine Center for Investigative Journalism website <www.pcij.org/stories/1995/pacc.ntml> plus </pacc2.html> and

</pacc3.html> and Jarius Bondoc, "Was Money the Motive for Kuratong Rubout?"

Philippine Star, 6 October 2003, p. 13. 17. Philip C. Tubeza, "SC Rules: Lacson Must Stand Trial for 'Kuratong'", Philippine

Daily Inquirer on-line version, 8 October 2003. Meanwhile, for the U.S. case see Rufo Aries, "Handcuffing Lacson", Newsbreak, 17 March 2003, pp. 16 and 20, and

Philip C. Tubeza and Christine O. Avenda?o, "U.S. Court Has Documents on Lacson Bank Accounts", Philippine Daily Inquirer on-line version, 16 September 2003.

18. Rodney Tasker, "A Tough Line at the Top", Far Eastern Economic Review, 20 February 2003, pp. 20-21.

19. Reuters, "Crisis in Philippines as Arroyo Rival Quits Cabinet", in the New York Times on-line version, 13 August 2002. See also two articles by Dona Pazzibugan in the on-line version of the Philippine Daily Inquirer, "Reproma, Promdi Support

Roco Bid", 16 October 2003, and "6 on Roco's Senate Slate", 23 December 2003.

Pazzibugan and Carli to Pablo co-authored "Roco Asked: Who He? Why Him?"

Philippine Daily Inquirer on-line version, 1 January 2004. 20. For background see Paul A. Rodell, "The Philippines: Gloria in Excelsis", Southeast

Asian Affairs 2002 (Singapore: Institute of Southeast Asian Studies, 2003), pp. 227-28, while a more recent update can be found in Aries C. Rufo, "Eduardo

Cojuangco vs. the Supreme Court", Newsbreak, 24 November 2003, pp. 16-17. 21. See the Philippine Daily Inquirer on-line version for superior commentaries by Joel

Rocamora, "Rule of Law vs. 'Areglo'", 17 November 2003, and Amando Doronila, "Denouement on the House Floor", 12 November 2003, as well as Davide's

excerpted letter, "House Probe Is an Assault on Independence of Judiciary", 3 November 2003.

22. Reuters, "Philippine Actor Poe Wants Presidential Role", in New York Times on-line version <www.nytimes.org>, 22 December 2003.

23. DPA Hong Kong, 'Japanese, Filipinos Not Optimistic about Economy", Taipd Times, 3 January 2003, p. 12.


24. Emmanuel S. De Dios, "Alarm over the Deficit", Newsbreak, 6 January 2003, p. 6. 25. See the Philippine Daily Inquirer on-line versions of Clarissa S. Batino and Agnes E.

Donato, "BIR Drive Catches 95% of Businesses Cheating", 22 April 2003, and Gil C. Cabacungan, Jr., "Budget Deficit to Narrow, Gov't Tells Creditors", 17 June 2003.

26. Carlito Pablo, "GMA Signs P804-B Budget; P13B Goes to Health", Philippine Daily Inquirer on-line version, 24 April 2003.

27. De Dios, Emmanuel, "Yes, the Economy Grew, But ...", Newsbreak, 21 July 2001, pp. 11-13.

28. See two articles by James Hookway in the Far Eastern Ecomonic Review, "Rule of Law Gone Haywire", 4 September 2003, pp. 20 and 22-23, and "Delayed Departure", 29 May 2003, pp. 20-21. See also Inquirer New Service, "Politics, Coup Try Blamed for Continuing Peso Slump", Philippine Daily Inquirer on-line version, 27 August 2003.

29. Editorial, "Deep in Debt", Philippine Daily Inquirer on-line version, 19 December 2003.

30. Doris C. Dumlao, "ADB Sees 4.5% Growth for Philippines in 2004", Philippine Daily Inquirer on-line version, 23 January 2004.

31. Norman Bordadora and Christine O. Avenda?o, "Peace Talks Better Option, Survey Shows, Philippine Daily Inquirer, 23 December 2002, pp. Al & Al8.

32. Delfin Mallari, Jr., and Jhunnex Napallacan, "More Blood to Flow, Says Red

Spokesman", Philippine Daily Inquirer on-line version, 28 January 2003. 33. http://www.inq7.net/verbatim/Draft_l-l7-03-pp.l l-20.pdf. 34. Mydans, Seth, "Communist Revolt Is Alive, and Active, in the Philippines", New

York Times on-line version, 26 March 2003. 35. James Hookway, 'The Business of Terrorism", Far Eastern Economic Review, 16 January

2003, pp. 50-52 and Manny Mogato, "To Fund a Revolution", Newsbreak, 31 March 2003, pp. 19-21.

36. Grace C. Albasin, and Anthony S. Aliada, "Even Macapagal Must Pay Fee for NPA Permit to Campaign", Philippine Daily Inquirer on-line version, 28 December 2003.

37. Clarice Colting, "Activists' Slay a Dying Case, Relative Say", Philippine Daily Inquirer on-line version, 13 November 2003.

38. See the on-line version of the Philippine Daily Inquirer for Alcuin Papa, "NPA Force

Waning but Influence Growing: Military, 10 January 2004, and Vincent Cabreza, "43,000 Killed in 34 Years of Communist Rebellion", 29 January 2003.

39. http://www.codewan.com.ph/CyberDyaryo/statements/st2003_0228_02.htm. 40. Philippine Daily Inquirer on-line version, Agence France-Presse with Christine O.

Avenda?o, "Al-Ghozi is a Key Figure in Regional Terror Network", 15 July 2003, and Julie S. Alipala, Edwin O. Fernandez, and Christian V. Esguerra, "Killing of Al-Ghozi: Shootout or Rubout?" 14 October 2003. See also Fel V. Maragay, Lolit Rivera-Acosta, Roy Pelovello, and Joel M. Sy Egeo, "Grenade Bolsters Shootout

Angle on Al-Ghozi," Manila Standard, 15 October 2003, and Richard C. Paddock and Al Jacinto, "Bomb Maker Gunned Down in Philippines", Los Angles Times, 13 October 2003.

41. See the Philippine Daily Inquirer on-line version, "Al-Ghozi, Two Abu Prisoners

Escape," 14 July 2003, Christina V. Esguerra and Juliet L. Javellana, "Manhunt Ordered for Escaped Bomber; Four Policemen Axed", 15 July 2003, and "Al-Ghozi

Slay Big Victory in War on Terror: President", 14 October 2003. 42. See the Philippine Daily Inquirer on-line version, TJ Burgonio and Edwin O.

Fernandez, "Indonesians, Moro Rebs Join Hunt for Escaped Terrorists", 18 July 2003, "Al-Ghozi Neither Killed Nor Recaptured, Says Gov't", 12 August 2003, Agence France-Presse, "MILF Commander Protecting Al-Ghozi, Says Military", 14 August 2003, and Alipala, Julie S., "Al-Ghozi Had 'Walked Out' to Escape from Police

Camp", 14 October 2003.

204 PaulA.Rodell

43. See the Philippine Daily Inquirer on-line version, Christian V. Esguerra, Michael L. Ubac, and Cynthia D. Balana, "PNP Chief Refuses to Resign, Suspects Foes", 16

July 2003, and "Spy vs. Spy: Military Probing Prober of Al-Ghozi Escape", 22 July 2003.

44. Labog-Javellana, Juliet, "No Proof of Al-Ghozi Collusion with Jailers", Philippine Daily Inquirer on-line version, 28 August 2003.

45. Philippine Daily Inquirer on-line version, editorials, "Angle's War", and "Rampage", on 2 March and 27 April 2003 respectively. See also Edwin Fernandez, "Fate of MILF Exploratory Talks in Malaysia Uncertain", Philippine Daily Inquirer on-line version, 6 May 2002.

46. Patricio . Abinales, "The Recluse", Newsbreak, 1 September 2003, p. 33. 47. Burnham, Gracia, In the Presence of My Enemies, Wheaton, IL: Tyndal House Pub

lishers, Inc., 2003, pg. 149-50. The most damning testimony by the July 2003 coup leaders came from Navy Lieutenant Antonio F. Trillanes who wrote two papers

detailing Navy corruption. See the Philippine Center for Investigative Journalism website, www.pcij.org/HotSeat/trillanes.html. See also the Center's expose by Ed

Lingao, "Arming the Enemy", Public Eye, July-September 2003 <www.pcij.org/ PublicEye/arming.html>. Also the Philippine Daily Inquirer on-line version, Stella O. Gonzales, "Trillanes Papers: Macapagal Weak, Navy Corrupt", 29 July 2003, and

Philip C. Tubeza, TJ Burgonio, and Alcuin Papa, "Macapagal, Reyes, Corpus Accused", 28 July 2003.

48. International Crisis Group, Jemaah Islamiyah in South East Asia: Damaged But Still

Dangerous, ICG, Jakarta/Brussels, Asia Report No. 63, 26 August 2003, pp. 16-23. 49. TJ Burgonio, TJ and Christian V. Esguerra, "Raiders Find Bomb Residue, Not

Virus, in JI Safe House", Philippine Daily Inquirer on-line version, 21 October 2003. For a recent update see, Kimina Lyall, "JI Grows Terror in Philippines", Weekend Australian, 13 December 2003, p. 16.

50. Koss, Mitchell, "Near Enough to View Militancy's Many Faces", Los Angles Times, 7 December 2003, Opinion, part M, p. 2.