Notwithstanding the attempts to re-fashion herself as a pro-poor president who promptly responds to people’s needs in times of crises, majority of Filipinos remain skeptical of President Gloria Arroyo’s performance, with a larger percentage expressing disapproval and distrust. Results of a recent Pulse Asia survey released a day before the State of the Nation Address (SONA) show that almost one in two Filipinos (48%) is critical of President Arroyo’s performance and a majority (53%) distrusts her.

The survey also reveals that trust and performance ratings were largely unaffected by the spate of cash dole outs and subsidy programs for the poor initiated by government, with respondents who have received these subsidies expressing the same level of disapproval and distrust.

Public distrust and disapproval of the Arroyo regime reached their highest levels between October 2007 and March 2008 at the height of the ZTE-NBN controversy that rocked the embattled administration to the point of near collapse. The latest ratings indicate that GMA has failed to reverse the general public’s critical judgment of her presidency, with negative perception and feedback continuously building up over the course of her corruption-mired seven year term.

GMA’s reported achievements and the prescriptions in her SONA, particularly in the areas of graft and corruption, agricultural development and agrarian reform and infrastructure development, should be viewed against the stark glare of controversies that Arroyo may have been able to ride out but that nevertheless continue to hound her embattled administration. The three cases below exemplify the massive kickbacks and large-scale plunder associated with the Arroyo administration.

North Rail Rehabilitation Project (2002)

A US$503 million contract between the North Luzon Railway Corporation (NLRC) and China’s National Machinery and Equipment Group (CNMEG) was signed to rehabilitate the Caloocan to Malolos section of the Philippine National Railways (PNR). A government-to-government deal financed the bulk of project cost, with a US$400 million loan granted by the Export-Import Bank of China on the condition that a Chinese firm bags the construction deal.

By 2004 allegations of overpricing and questions on the feasibility of relocating 40,000 residents started to hound the project. According to reports, the North rail reconstruction costs US$15 million per kilometer, more expensive than the ground-breaking 2,000-km Qinghai to Tibet system, which only cost US$3.6 billion, or US$1.8 million per kilometer. A substantial part of the initial downpayment allegedly went to kickbacks and payoffs. Since 2004, the Philippine government has reportedly paid out P1.4 billion for the project that has yet to commence, with interest payments amounting to a massive P1 million a day. In 2005, two separate Senate committees began investigation on the two issues of relocation and alleged price-padding.

The Senate investigation on the alleged overpriced contract continued despite the lack of cooperation from the executive branch which repeatedly invoked executive privilege. Under Executive Order 464, department heads are required to seek executive permission first before appearing in Senate hearings.Calls to nullify the contract reached the courts when affected residents with assistance from the League of Urban Poor Action (LUPA) and the UP Law Center filed cases before the Supreme Court and the Makati Regional Trial Court. On May 15, 2007, Judge Cesar Santamaria of Makati RTC Branch 45 issued an omnibus order that upheld the petition of LUPA-Bulacan and lawyers from UP Law Center.

In early July 2008, NLRC President Edgardo Pamintuan issued a statement saying the project has been “demobilized” due to differences with the Chinese on engineering and construction standards. Pamintuan retracted his statement a few days later saying that the project has just been delayed due to the failure of the NLRC to clear old railway bridges and ordered the demolition of the said railway within 45 days. NLRC is now reviewing the contract eyeing the resumption of the project.

Fertilizer Fund Scam (2004)

P728 million in fertilizer funds under the Ginintuang Masaganang Ani (GMA) program were allegedly diverted to the campaign kitty of GMA to finance her 2004 presidential bid. Reports show that the funds were released to dummy non-government organizations and cooperatives, as well as in urban areas where no farming is done.

A Senate investigation into the deal recommended that President Gloria Macapagal-Arroyo be held accountable in the mismanagement of the fund. The joint committee report prepared by the Agriculture and Food, and Blue Ribbon committees recommended the filing of plunder and graft charges and malversation of public funds against former Department of Agriculture (DA) Secretary Luis Lorenzo, DA Undersecretary Jocelyn “joc-joc” Bolante, Undersecretary Ibarra Poliquit, incumbent Undersecretary Belinda Gonzales, and Assistant Secretary Jose Felix Montes.

The report has been sitting in the Department of Justice and the Ombudsman. Bolante left the country at the height of the Senate investigation. He was arrested and detained in the United States on July 7, 2006 for possession of a revoked US visa. Bolante, who is believed to be a close associate of First Gentleman Jose Miguel Arroyo, later applied for but denied political asylum.

The Senate Committee on Agriculture under the administration of Senator Edgardo Angara has refused to reopen the investigation saying that the Senate has already done its job and the report has already been submitted to the Department of Justice (DOJ) and the Ombudsman.

The Court of Appeals (CA) First Division recently granted the petition filed by the Anti-Money Laundering Council to freeze 70 bank accounts listed under Bolante and some other individuals and entities allegedly linked to the scam. The CA found probable cause that these accounts could be where the P728-million fertilizer funds have been transferred.

ZTE-NBN Broadband Deal (2007)

A $329 million contract between the Philippine government and the Chinese telecommunications firm, Zhong Xing Telecommunication Equipment Company Limited (ZTE), was inked in order to build a national broadband network intended to improve communications between government agencies.

The deal triggered a scandal when reports came out in the media about alleged US$130 million in kickbacks involving Benjamin Abalos, then Chairman of the Commission on Elections (COMELEC), as well as the First Gentleman Jose Miguel ‘Mike’ Arroyo.

By September 2007, five months after the story broke out in the media, a full-scale Senate investigation was launched. The Senate investigation produced a number of witnesses including Joey de Venecia, co-owner of Amsterdam Holdings, losing bidder for the NBN project, and son of then House Speaker and erstwhile GMA ally Jose de Venecia. The younger de Venecia accused the First Gentleman Mike Arroyo of pushing the over-priced contract and telling him to “back off” from the project. Former NEDA chief Romulo Neri also appeared before the Senate and confirmed that Abalos was brokering the deal and that the Comelec Chair offered him a P200 million bribe in exchange for NEDA’s go-ahead for the project. Invoking executive privilege, Neri later declined to answer questions on whether or not he got specific orders from President Arroyo to approve the ZTE contract.

President Arroyo suspended the broadband contract with ZTE on September 27, 2008 and in October Abalos resigned from the Comelec. These actions, however, did not stop the Senate from continuing with its investigation. By January 2008, a new witness, IT expert Rodolfo “Jun” Lozada, a trusted colleague of Neri, surfaced after being abducted by the police, and gave his own account to the Senate regarding the web of bribery, kickbacks and overpricing surrounding the controversial contract.

In February, the DOJ and the Ombudsman started their own investigations into the deal. In March 2008, the Supreme Court, in a vote of 9-6, upheld Neri’s invocation of executive privilege.