US embassy cable - 05MANILA3133

S E C R E T SECTION 01 OF 02 MANILA 003133 
 
SIPDIS 
 
E.O. 12958: DECL: 07/07/2015 
TAGS: PINS, PGOV, EAID, RP 
SUBJECT: ARROYO DEMANDS FULL CABINET SUBMIT RESIGNATIONS 
 
REF: A. MANILA 3088 
 
     B. MANILA 3054 
 
Classified By: A/DCM Scott Bellard for reasons 1.4 (b) and (d) 
 
1.  (S)  Summary.  In an apparent pre-emptive move against 
threatened resignations by some key Cabinet members, 
President Arroyo announced to the nation on July 7 that she 
had asked for the resignation of her entire Cabinet and would 
focus her own efforts in the future on political reform. 
Former President Aquino and Archbishop Rosales still intend 
to press for her resignation today.  The extent -- and 
quality -- of those not planning to return to the Cabinet are 
still largely unknown publicly, but many politicos already 
realize that Finance Secretary Purisima was the one who 
pushed her hand.  GMA's likelihood of remaining in office has 
diminished sharply, although she may be able to weather 
criticism and commentary in the next few days or perhaps even 
longer.   End Summary. 
 
2.  (U)  In a brief prime time radio broadcast on July 7 
(carried also on major television channels), President Gloria 
Macapagal Arroyo reiterated that she would not/not resign but 
announced that she had requested the resignations of her 
entire Cabinet.  She noted that this move would help her move 
forward to reorganize the Cabinet; she promised that Cabinet 
members would henceforth have a "free hand to govern" while 
she would focus on fundamental changes to the political 
system and outreach to political and civil society.  She 
claimed that this was not a "political ploy or gimmick" but 
rather represented an effort to make real reforms in the 
political way of life as a "legacy" to the children of the 
Philippines.  She lamented that she had been personally 
"demonized" and that the entire political system had 
"degenerated" to a point where no one's hands were 
"untainted."  She criticized ongoing Congressional hearings, 
which she said were clearly not in aid of legislation.  She 
admitted that some of her advisers had urged her not to make 
the admission last week about her "lapse in judgment" about 
talking to an election official in 2004, but insisted that it 
was nonetheless the right move and that the conversation had 
taken place after the certificates of voting had already been 
counted.  She noted that she had originally planned to call 
for political reform in her State of the Nation Address on 
July 25, but instead decided to begin now. She claimed that 
if she resigned, this would only encourage a series of "EDSA" 
people power movements in the future. 
 
3.  (S)  Finance Secretary Cesar Purisima confirmed to Charge 
that he had, as planned (ref b -- notal), confronted Arroyo 
on July 7 to demand her resignation or face the resignation 
of her entire economic team and some other trusted Cabinet 
members.  He noted that her response had left him no choice 
but to proceed as planned.  He confided that former President 
Corazon Aquino and Manila Archbishop Rosales still planned to 
meet with Arroyo late on July 7 to demand her resignation, 
and promised to brief us on the outcome. 
 
4.  (S)  Purisima's unhappiness and intention to resign have 
already become known in political circles.  Opposition 
legislator Ronnie Zamorra described a "Cabinet mutiny" led by 
Purisima and Trade Ministry Santos.  GMA coalition-mate 
Congressman Gilberto Teodora said Arroyo had clearly acted to 
"pre-empt" resignations of "civil society Cabinet members" 
including Purisima, but called the move "panicky."  House 
Ways and Means Committee Chairman Jesli Lapus, a key ally in 
the VAT legislation passage, nonetheless called the 
President's move a "good one," but admitted that Arroyo 
apparently was "forced by circumstances to ask for courtesy 
resignations." 
 
5.  (S)  Comment:  Arroyo is digging in her heels, as 
expected.  Her pre-emptive move to dismiss the Cabinet was an 
attempt to make the best out of a bad situation, at least 
until the extent -- and quality -- of those not returning to 
the Cabinet quickly become known.  Influential business 
community representatives as late as the afternoon of July 7 
had indicated that they were sticking with her, for now, and 
would not demand her resignation.  This may soon change, 
especially as economic news worsens, including reports that 
the GRP had had to begin to intervene to prop up the peso. 
Today's news could be much worse -- she did not declare 
martial law and there are no signs of any interest by the 
military in political intervention or a coup d'etat -- but at 
best represents an against-the-wall effort by Arroyo to 
remain in power.  She apparently is willing to jettison the 
focus on her once ambitious economic and financial reform 
agenda as she pursues a doomed short-term battle for 
significant political reform.  The likelihood of her 
remaining in power has now diminished sharply, although she 
should be able to weather the barrage of criticism and 
commentary over the next few days -- or perhaps even longer. 
MUSSOMELI