HE DID not go willingly or even, if looked at too closely, lawfully. But the fall of Joseph Estrada marks a new beginning for the Philippines, and the inclination of most of its citizens, as well as of most foreign governments, this week has been to breathe a sigh of relief and let the new president, Gloria Macapagal Arroyo, get on with the job. Investors celebrated in sympathy with the victorious protesters, lifting the peso and the stockmarket from the depths to which they had sunk under Estrada's long ordeal. From capitals east and west, and most crucially from Washington, came congratulation and pledges of support.

But Arroyo, an American-educated economist with years of experience in government, is shrewd enough to know that the celebrations will soon end. Before long, Filipinos will be arguing about what the latest upheaval was for. And although Arroyo was elected vice-president in 1998 with unprecedented support, the battle to unseat Estrada has hurt her, in three ways.

First, she is now less trusted than ever by most poor Filipinos, who see her as having stolen power from their hero. Second, in helping to lead what its supporters have been quick to label "people power two" in a deliberate echo of the widely-based revolution that brought down Ferdinand

Marcos in 1986, Mrs Arroyo has joined hands with an unwieldy coalition. The cast list ranges from businessmen who crave a period of stability to anti-establishment groups that will press for leftist reforms. Third, the new president inherits an economy that has been devastated by Estrada's paralysis.

And then there is Estrada himself, who stubbornly refuses to go away. Not that he has the option of leaving the country altogether: he and his immediate family have been banned from fleeing. But what is to become of him? Now that the impeachment hearings have become void, the country's ordinary prosecutors are promising to bring criminal charges against him. One such that of plundering the economy is potentially punishable by death. Estrada meanwhile maintains that he has never properly resigned his post, and that he will challenge Arroyo's "temporary" presidency.

Quite how he plans to do so, however, is a bit of a mystery. The Supreme Court has unanimously handed the job to his successor, thus barring any hope of a legal challenge. The country's top generals have all abandoned him, making a bloodless counter-revolution impossible and a bloody one hard to imagine, despite unsubstantiated rumours. And although his supporters might attempt their own version of people

power, the team that has just ousted him boasts all the popular heroes of the genre: the country's leading prelate, Cardinal Jaime Sin, along with ex-Presidents Corazon Aquino and Fidel Ramos. Those three have no counterparts on the ex-president's side.

So while the Estrada saga continued this week protesters gathered at a bank to prevent him from withdrawing $3m Arroyo did her best to ignore it, devoting much of her early energy to short-term economic problems. The budget deficit was 136 billion pesos ($2.8 billion) in 2000, more than twice the government's target. The new government is warning of a 190 billion peso shortfall this year, including 70 billion pesos of additional expenses that went unpaid last year. And although the president enjoys extraordinary budgetary powers in the Philippines including a line-item veto and the ability to reallocate funds easily most of the problem is on the other side of the ledger. The country's tax-collection system, notoriously porous to begin with, has sprung several new leaks in the past year.

The other immediate economic task will be to combat slowing growth. The Philippines could be hit hard by any slowdown in America, especially in the demand for electronics; and there are worries that 2001 will be a bad year for crops. One good way to

offset these short-term problems would be to persuade investors that the long-term outlook has fundamentally changed with Estrada's departure. Because Mrs Arroyo will be eligible for a full six-year term when this one ends, she could potentially be president for the next nine years.

She thus has a strong interest in promoting growth and sensible investment. The reforms that she is promising to eliminate corruption, develop the country's regions and boost education will not only raise its long-term economic prospects, but could also, slowly, begin to reduce the resentments that still fester among the poor.

They had backed Estrada a drunken, womanising, film star who was kicked out of high school for

brawling as their champion against the elites that have run the

Philippines since its independence in 1946. Many continued to do so, despite all the evidence that he was corrupt. That speaks volumes about the yawning gap between the haves and the have-nots: while the richest families thrive, the poor living in Manila's slums are often buried sometimes literally in the rubbish

that the system creates. A revolution that does not change this divide will hardly seem like people power to them. Courtesy: The Economist of London [January 25, 2001]