Just as the real economic indicators were saying that things are actually going well in the Philippines, a new wave of controversy is threatening to undo the gains made to date.

As if the ongoing Senate hearing on the jueteng (illegal numbers game) pay-offs controversy involving the president's husband and son was not enough, Manila was abuzz since last week with a hot new topic.

This time it involves President Gloria Macapagal Arroyo herself supposedly caught on record giving instructions to cheat and ensure her victory in the May 2004 polls. The "evidence" consists of phone conversations, illegally tapped and allegedly altered, between the president and a certain 'Gary' on various dates during May and June last year.

The fact that the target is Arroyo herself and that her office pre-empted the release of the recordings to the media by opposition politicians shows that the president is taking the issue very seriously. Such action should be seen in the light of Arroyo's sensitivity to issues of legitimacy, given her ascendancy to the presidency in 2001 when Estrada was toppled by a military-backed popular uprising.

Her victory in the May 2004 elections therefore had to be convincing in order to lay to rest challenges to her government's right to rule. The defeated candidate, movie actor Fernando Poe Jr, legally challenged Arroyo's electoral victory claiming that he was cheated. However, Poe's death from a heart ailment last December prompted the Supreme Court to throw the case out.

Who and why now?

The questions that should be asked at this point are: 'Who recorded the phone conversations?' and 'Why are they only released now?'

The spliced conversation of Arroyo has come at a very convenient time, too significant to be accidental. Last week, coup rumours wildly circulated again. At the Lower House, Left-leaning party list representatives threatened to impeach the president. The Opposition claims that the recordings prove election cheating and, thus, Arroyo's presidency is illegitimate.

That they have chosen to air the allegations to the media instead of filing lawsuits shows that propaganda is the over-riding motive. The Opposition, of course, has enough lawyers who know that, being illegally tapped, the tapes are inadmissible as evidence in court.

Already, the president's net satisfaction rating fell to -33 percent in the May 2005 Social Weather Station survey - said to be the lowest ever for a president since 1986. This is due to people's dismay with increasing inflation and oil prices, new taxes, and the perception of a losing war against corruption.

With these, Opposition politicians are hoping for a 'snowball' effect that will ultimately lead to another 'People Power' movement to replace Arroyo.

The military has gone on red alert for possible destabilisation ahead of the nation's 107th celebration of Independence last Sunday. The crisis has already spooked the market, sending jitters among foreign investors.

The local market reacted swiftly with the stock market plunging three percent, while the peso retreated to a three month low of 55.20 to the US dollar. The controversy is also coming at a bad time, with the Arroyo administration preparing an economic team for a roadshow to Europe and the US to generate interest in the country's planned borrowing from foreign financial markets this year.

Yet, while dissatisfaction is high, there is really no mass support at the grassroots level or among the military for another 'People Power' uprising. Replacing Arroyo would not solve the country's structural problems of poverty and weak institutions. More importantly, the Opposition does not offer a viable alternative beyond agitation.

Destabilisation plan

The government claims the release of the illegal recordings is part of a 'grand destabilisation plan'. To its advantage, Congress is on recess until July 23. Thus, Arroyo has time to consolidate her forces.

Arroyo has categorically responded that nobody in her family is above the law and has ordered the Justice Department to investigate and file corresponding charges if need be. She has also ordered the investigation of the controversial telephone conversations. The US has denied involvement in the wiretapping and spying.

Key players have pledged allegiance to the government and to upholding the Constitution. The Armed Forces of the Philippines and the Philippine National Police have released statements to this effect. In addition, the Liberal Party and the League of Local Government Officials have thrown their support behind the president. Even the Supreme Court Justice, Hilarion Davide, who presided over the Estrada impeachment in 2001 and is viewed as one of the most credible government officials, has called for sobriety.

On live radio on Thursday last week, Arroyo appealed to Filipinos to be patient as she put painful fiscal reforms in place. "I won't be stopped from doing my job to revive the economy. I am saddened that while I am doing my job, there are people who want to bring me down or undermine my capability to govern the country."

She declared "full confidence in our soldiers, as well as the cooler heads of our citizenry, that they will defend our democracy and exert the maximum effort toward its protection."

Arroyo denies claims

Arroyo disputed opposition allegations that she cheated in the May 2004 elections. She affirmed that her winning over 40 percent of the total votes and obtaining a margin of one million votes was something that could not be achieved by cheating.

She also reiterated her commitment to focusing on the economy, addressing the oil price increases and unemployment problem, and building more infrastructure projects.

In a country where 'People Power' has been twice successful in deposing presidents, the phrase has an ominous sound. It has been resorted to in the past, however, because democratic institutions have failed the people. Yet making a habit of it each time a controversy erupts is counterproductive.

The speedy resolution of the current political crisis is to the advantage of the entire nation. Thus, if there is really credible evidence of wrongdoing by the President or any of her relations, criminal cases should be filed accordingly. Otherwise, it is distracting and unfruitful, as the government wastes its energies responding to intrigues and allegations.

Can Filipinos solve their problems democratically and constitutionally, respecting rather than subverting existing institutional set-ups? The latest controversy is one test of many to prove that the country is on the road to democratic stability and institutional maturity.

DR LORRAINE CARLOS SALAZAR is an assistant professor at the University of the Philippines and currently a visiting research fellow at the Institute Of South East Asian Studies. The opinions expressed in this piece are the author's personal views.