US embassy cable - 05MANILA3413

C O N F I D E N T I A L SECTION 01 OF 02 MANILA 003413 
 
SIPDIS 
 
DEPT FOR EAP, EAP/PMBS, INR/EAP, EAP/PD 
NSC FOR GREEN 
 
E.O. 12958: DECL: 07/26/2015 
TAGS: PGOV, PINS, PINR, PREL, ECON, KPAO, RP 
SUBJECT: POSITIVE MEDIA COVERAGE FOR ARROYO SPEECH, BUT 
LITTLE SIGN THAT IT CHANGED MINDS 
 
REF: A. MANILA 3397 
 
     B. MANILA - EAP/PMBS 07/25/05 E-MAIL 
     C. MANILA 3391 
     D. MANILA 3367 
 
Classified By: Political Officer Timothy Cipullo for 
Reasons 1.4 (b) and (d). 
 
1.  (C) Summary:  President Arroyo's July 25 State of the 
Nation Address (SONA) netted positive coverage in the media. 
Political reaction generally fell along predictable lines, 
with supporters asserting that it was an excellent speech, 
while the opposition castigated it.  On the economic side, 
reaction was mixed, with contacts demanding that she follow 
up on her promises.  Overall, Arroyo possibly gained a small 
degree of momentum ahead of the House's review of the 
Opposition's impeachment complaint, but there is little sign 
that she really changed the political equation in her favor. 
End Summary. 
 
Positive Media Reaction 
======================= 
 
2.  (U) Media coverage of President Arroyo's SONA was largely 
upbeat.  (Note:  See refs a-b for a review of the speech and 
its full text.  End Note.)  Manila newspapers contained large 
photos of Arroyo delivering the speech in the House of 
Representatives and reported that she was interrupted by "34 
rounds of applause."  Articles also placed a spotlight on the 
bid to impeach the president and the fact that it failed to 
gather enough signatories to gain immediate referral to the 
Senate when it was filed on July 25 (refs a and c).  Media 
analysis of the speech, however, was more evenhanded; radio 
talk shows seriously questioned the utility of President 
Arroyo's proposal for Constitutional changes, for example. 
Despite the positive front-page headlines, several columnists 
asserted that the SONA was extremely brief (in fact, the 
shortest on record) and seemed to lack substance.  As one 
columnist, Max Soliven of the centrist "Philippine Star," 
wrote: "Yesterday's SONA didn't measure up to a 'forward 
march' address, but represented La Gloria (i.e., Arroyo) 
digging in her heels and claiming a 'glorious' status quo.  A 
status quo is not enough." 
 
Predictable Political Reaction 
============================== 
 
3.  (C) Political reaction generally fell along predictable 
lines, with Arroyo's supporters asserting that it was an 
excellent speech, while the opposition castigated it. 
Malacanang Secretary for Political Affairs Gabriel "Gabby" 
Claudio, noting the many interruptions for applause the 
speech engendered, stated, "Judging from the way the audience 
reacted, I think it was a very appropriate speech and fitting 
tribute to the legislators, the local government officials 
and to all other Filipinos who are looking forward to the 
reforms that will bring about progress to the country." 
House Speaker Jose De Venecia, a close ally of the 
President's, welcomed Arroyo's plan to work toward 
implementing a parliamentary system of government as a 
"dramatic and historic change."  Other House representatives 
that Mission touched base with praised the speech and said 
that the House would immediately begin work on Constitutional 
changes.  In a conversation with Acting POL/C, Congressman 
Anthony Miranda, an Administration supporter, emphatically 
praised the speech, claiming that Arroyo had shown herself to 
be "a strong leader." 
 
4.  (U) However, some Arroyo allies were less than impressed 
with her calls for changing the Constitution. 
Pro-Administration senators Miriam Defensor-Santiago, Pia 
Cayetano, and Manuel "Mar" Roxas II argued that Arroyo should 
deal with other issues before tackling the issue of possible 
Constitutional changes.  Roxas told the press on July 25, 
"The Constitution is not the problem.  It did not cause this 
political crisis."  (Note:  Many senators of all political 
stripes are unhappy with the proposals to change the current 
bicameral system to a unicameral legislature given that  the 
Senate would be abolished.) 
 
5.  (C) The Opposition, not surprisingly, was quick to attack 
the President's speech, sometimes in harsh terms.  In a July 
26 conversation with Poloff, Lito Banayo, a political adviser 
to Opposition Senator Panfilo Lacson, characterized Arroyo's 
speech as a "tactical move" designed to pander to Congress to 
dissuade its members from acting on the recently-introduced 
impeachment complaint (ref c).  Senate Minority Leader 
Aquilano Pimentel Jr. echoed these sentiments and went on to 
label the speech "a pack of lies and half-truths to buy her 
time."  Others criticized the speech for what they felt was 
its brevity and lack of detail.  Archbishop Oscar Cruz, a 
Catholic prelate with close Opposition links, said Arroyo's 
speech was no different than previous SONAs, which he said 
were full of "failed promises." 
Economic Side:  Wait and See 
============================ 
 
6. (C) Early business community reaction to the address was 
mixed, but few business leaders gave Arroyo very high marks. 
Philippine Chamber of Commerce and Industry President Donald 
Dee, who has supported Arroyo throughout the recent political 
turbulence, gave the President credit for saying "what we (in 
business) wanted to hear: that she would focus on the economy 
and that she would allow political reforms to take place." 
Leaders in the Chinese-Filipino business community told us 
they strongly support Arroyo and want to see her implement 
more reforms.  Many Filipinos are eager to move beyond this 
period of turbulence as it works against business interests. 
Other business leaders, however, were less enthused.  Makati 
Business Club Executive Director Bill Luz, who has called for 
Arroyo's resignation, said, "I am disappointed with the 
President's address.  She skirted the leadership issues." 
Many, including foreign investors, expressed some 
disappointment, but concurred that she accomplished the 
short-term goal of promising enough to maintain the immediate 
economic calm by focusing on the accomplishment of the three 
fiscal reform initiatives Congress passed last year (the 
amended VAT law, the amended "Sin" Tax, and the lateral 
attrition law).  The local stock and currency markets seemed 
to reflect that assessment, opening July 26 basically 
unchanged and trading slightly up at mid-day. 
 
Comment 
======= 
 
7. (C) Overall, Arroyo probably gained a small degree of 
momentum via the speech.  Most neutral observers seem to 
agree that the speech was a bit short and not extremely 
impressive in content.  However, during what has been a very 
difficult timeframe for her, it was a political boon for 
Arroyo to be able to present herself as the leader of the 
country standing before a giant Filipino flag.  None of her 
opponents can present such an image and she took full 
advantage of the trappings of office.  Despite the positive 
visuals, there is little sign that she really changed the 
political equation in her favor.  In any case, she will need 
whatever traction she has picked up in the next several weeks 
and months as the House reviews the Opposition's impeachment 
complaint. 
 
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MUSSOMELI