Manila's anti-graft court orders arrest of Arroyo, 3 others

Reuters News
Posted: Mar 13, 2012 5:44 AM
Manila's anti-graft court orders arrest of Arroyo, 3 others

MANILA (Reuters) - The Philippines' anti-graft court on Tuesday ordered the arrest of former leader Gloria Macapagal Arroyo, her husband and two former officials in a case which President Benigno Aquino sees as a key to cleaning up the government and attracting investors.

Arroyo, already under hospital arrest since late November on charges of electoral fraud in a lower court, is this time accused of using her position to push for the approval of a $329 million broadband deal with China's ZTE Corp in 2007.

Arroyo, a 64-year-old who was president from 2001 to 2010, was forced to scrap the contract in 2008 after a congressional inquiry showed some of her officials allegedly received kickbacks for the deal.

Her trial is central to Aquino's pledge to tackle endemic graft that threatens to take shine off an economic revival and investment rebound in the Philippines.

Investors seem confident the economy will strengthen -- the stock market is up 14 percent in 2012, and up by more than a third from Sep. 26, when it posted its lowest close for 2011.

Aquino is also pushing the impeachment of the country's Supreme Court chief, Renato Corona, who was installed by Arroyo and is accused of protecting her from investigation. The former president and her allies accuse Aquino of pursuing a political vendetta against her.

Analysts say Aquino risks losing support if he is seen to be far tougher on Arroyo appointees than on his own picks, said security consultancy Pacific Strategies and Assessments (PS&A).

"If President Aquino continues this selective approach to fighting corruption, he jeopardizes legitimate prosecution of major Arroyo administration wrongdoing and being labeled by a growing percentage of the Philippines populace as simply vindictive," it said in a recent report.

Arroyo denies all the charges.

(Reporting By Manuel Mogato; Editing by Jonathan Thatcher)