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Arroyo's promise goes unfulfilled

President Arroyo took office in the Philippines with ambitious plans to increase revenues, curb corruption and cut the state deficit. But after two years in office little has been achieved on these fronts. Now pessimistic country analysts are making worrying comparisons between Asia's busiest sovereign borrower and Argentina.

AN ANALYST AT a US investment bank is cutting about the Philippines government. "They have no credibility," she says. "They are so bad that I can't even bring myself to listen to them any more. And my clients are losing faith."

Unfortunately for the Philippines, this is not a lone renegade voice condemning the performance of president Gloria Macapagal Arroyo's administration. It's a view echoed by many. The head of global markets at another bank with pan-Asia coverage says: "On paper the players look technically very impressive, and they give the best Powerpoint presentations, but they continually fail to deliver. Their credibility is severely stretched."

In just two years, the goodwill and support that Arroyo and her band of technocrats claimed when she stepped into the shoes of the disgraced Joseph Estrada have been frittered away. Her plans to stamp out corruption, increase tax revenues, rein in a stampeding budget deficit, privatize state assets and tackle poverty are in tatters. "There's a real danger that Arroyo's legacy will just consist of a boulevard named after her father on a piece of reclaimed land," says a disheartened banker in Metro-Manila.

For all Arroyo's efforts, corruption is still endemic.

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