Philippine president to lay out economic road map in speech to Congress

President Gloria Macapagal Arroyo was expected to focus her annual address to the nation Monday on a strong economy, a bright spot in her six years in office, as police braced for thousands of protesters.

Arroyo has weathered several coup plots since she came to power after her predecessor was ousted on corruption charges in 2001. She was tainted by allegations of cheating in the 2004 presidential polls, but has managed to make the economy the centerpiece of her presidency.

The economy is growing at its fastest pace in 17 years, surging 6.9 percent in the first quarter of 2007. The stock market has hit an all-time high and the peso is at a seven-year high against the U.S. dollar.

Economists have credited Arroyo with crucial fiscal reforms to hike revenues, reduce the budget deficit and tame inflation while inviting more foreign investment to the Philippines. But critics say growth has not alleviated poverty or significantly reduced unemployment.

The World Bank said investments amounted to 15 percent of gross domestic product in the first quarter, while comparable economies were attracting 20 percent or higher.

Nearly half of the country's 87 million people still live on US$2 (€1.45) a day, and 10 percent of the population works abroad, sending home US$12.8 billion (€9.8 billion) last year in remittances.

To maintain the pace of reforms and increase growth, Arroyo has invited foreign companies to participate in huge infrastructure projects worth nearly US$1.7 billion (€1.2 billion). The projects will involve the construction or expansion of roads, bridges, irrigation systems, and power transmission and generation facilities, and existing railway systems.

"For the next three years, President Arroyo intends to lead us on a path of economic growth, political stability and social justice," her spokesman Ignacio Bunye said Sunday.

"One can be certain that among her most important goals during that period would be to ensure more and more of our people will not just see, but more importantly experience, the tangible benefits of our growing economy," he said.

Benito Lim, a political analyst and professor at Ateneo de Manila University, said he expected a lot of skepticism because people "have heard all of her claims before and they have not been fulfilled."

He said the population was growing fast and unless the country achieved an economic growth rate of 8 percent or more, "the people will not feel the benefits."

Left-wing protesters vowed to gather up to 10,000 people outside the House of Representatives, where Arroyo was to address a joint session of Congress.