I would really want to know how and why idealistic and intelligent young officers are inveigled to join these plots by self-serving politicians. Either there is something wrong about how we educate our soldiers or there is something wrong with the way we manage our military or some unscrupulous politicians have superb persuasive skills – or all of the above. I want to see a clear picture of how a conspiracy like this ripens into armed action. I expect the commission to give me that picture.

The President accepted with deep regret this morning the resignation of Brig. Gen. Victor N. Corpus as ISAFP Chief.

The President made clear, however, that she is not accepting General Corpus offer to retire from the service.

The President described General Corpus as a noble officer.

A copy of Gen. Corpus letter dated July 29 is attached:

"The current political crisis is far from finished. There is still a deep restiveness in the Officer’s Corps of the AFP. The putchists are asking for my resignation. Although I can honestly say that their accusation that I had a hand in the Davao bombings is without basis, I think that it is best for all that I get out of the picture.

"In chess, when a queen is beleaguered it is sometimes necessary to sacrifice a knight to save the game. I fell that the restiveness will not calm down with my continued presence. I therefore tender my irrevocable resignation from my position as Chief of the Intelligence Service of the Armed Forces of the Philippines and retire from the Armed Forces of the Philippines effective upon the approval of my resignation.

The Legislative –Executive Development Advisory Council (LEDAC) formally approved for adoption today 15 priority measures and other specific bills representing a doable but high-impact common legislative agenda.

Nine priority legislative measures which were highlighted in President Gloria Macapagal-Arroyo’s State of the Nation Address (SONA) last Monday and six others in the common legislative agenda as approved last May 7 make up the list representing the government’s resolve to address priority concerns.

The 15 measures approved for adoption as priority measures by the LEDAC meeting today presided over by the President are:

1. Farmland as loan collateral

2. Compensation to human rights victims

3. Anti-Terrorism Act

4. Transco franchise

5. Reforms in campaign finance

6. Rationalization of automobile tax

7. Rationalization of documentary stamp tax

8. Indexation of sin taxes

9. National Revenue administration

10. Judiciary compensation rationalization

11. Dual Citizenship Act

12.Quarantine program for SARS

13. Optical Media Act

14. Securitization Act

15. Department of Housing and Urban Development

Of these, only the rationalization of the automobile tax has been approved by both chambers of Congress.

The farmland as loan collateral, Transco franchise, rationalization of documentary stamp tax, Optical Media Act, Securitization Act and Department of Housing and Urban Development were already approved by the House but are still on second reading in the Senate undergoing interpellation.

President Gloria Macapagal-Arroyo has said that her declaration not to run in next year’s election has allowed her to make unpopular decisions, including making peace with the separatist Moro Islamic Liberation Front (MILF).

In a recent interview with Time magazine, excerpts of which were carried by CNN-Time Asia, the President said that making peace with the MILF "is not totally popular."

She said that her government has been doggedly pursuing the peace process in Mindanao. "And I am feeling very gratified that this is now within grasp," the Presidents said.

Earlier, Malacaņang announced that the government and the MILF would soon resume peace negotiations in Kuala Lumpur under the auspices of the Malaysian government.

The President said that she does not want to be distracted by politics and would rather talk about reforms.

"These are the things that occupy my time; they occupy my energies," the President said.

She also said the peace talks would not prevent the government from hitting any terrorist camp in Mindanao, either of the MILF or of the Jakarta-based Jemaah Islamiah (JI).

"There is nothing in the terms of reference of the proposed peace talks that says that we will not go against terrorism, that we will not enforce the law," the President said.

Budget and Management Secretary Emilia Boncodin said today the effect of last weekend’s failed mutiny on the economy is now being assessed although she is expecting no major or substantial changes in the macro numbers.

Boncodin made the announcement during her presentation of the proposed 2004 national budget of P864.8 billion to the Legislative-Executive Development Advisory Council (LEDAC) today at the State Dining Room of Malacanang.

Boncodin said the economy posted a steady growth since 1997, with inflation rate on the downtrend. The country’s growth rate, she said, are quite respectable.

"The government’s target is to balance the budget and restore health in the fiscal sector. It also plans to reduce the country’s debt burden in the medium term," she said.

A major feature of the 2004 budget is the increase in the allocations for new school buildings and teachers.

To address the perennial problem of classroom and teacher shortage, President Gloria Macapagal-Arroyo ordered an audit of school board funds.

The problem, she said, is not the lack of teachers but their distribution since the prevailing ratio is 34 students to a teacher based on a school-to-school statistics.

The proposed 2004 national budget will be submitted to Congress first week of August. Boncodin has marked Aug. 6 as the date of submission.

The House of Representatives, through Speaker Jose de Venecia, Jr., has committed to pass on to the Senate the proposed budget by the end of September at the earliest with committee hearings to be conducted even during the break.

Meanwhile, the President has announced during the meeting that US President George W. Bush has expressed his desire to witness the signing of a formal peace agreement between the Philippine government and the Moro Islamic Liberation Front (MILF).

The President said, however, that this would all depend on the Malaysian government, which is the host of the formal peace talks.

The government of President Gloria Macapagal-Arroyo has notched considerable gains in improving the economy, in fighting graft and corruption and in forging a lasting peace in Mindanao, according to Time, a respected American newsweekly, in the Aug. 4, 2003 issue of its Asia edition.

In its cover story, entitled "A Time for Prayer," Time said that over the past year, the President, who it described as a "hard-nosed technocrat," had "finally risen and some strong results have followed."

Time’s cover showed the President in a formal pose although it carried a different teaser, entitled "Crisis Management: Philippine President Gloria Arroyo Stares Down a Mutiny As She Mulls a Second Term."

The cover story was pegged on Sunday’s Makati siege by a group of disgruntled young military officers, saying the mutiny posed the "toughest test" of the Macapagal-Arroyo presidency.

But Time admitted that the Philippine economy has improved during the past few months.

"On the economy: unemployment and interest rates are declining. So is the budget deficit, which had reached a worrisome level last year," Time said.

It said that during the first six months of this year, the deficit was 33 percent lower than during the same period last year, adding that this was mainly due to the "anti-corruption drive at the notoriously lax Bureau of Internal Revenue."

The magazine cited the efforts of BIR Commissioner Guillermo Parayno for weeding out wrongdoers and for introducing more efficient computer systems in the bureau that decreased opportunities for graft.

The result, according to Time, was a 14.7 percent increase in revenue collections in June this year compared to that of last year.

All these have resulted in a 4.4 percent economic growth in the Philippines, Time said, although it added that economists have said that the Philippines needs more than 7 percent growth rate to reduce poverty and absorb the impact of high population growth.

Time said the short-lived mutiny over the weekend "is an example of how the government’s agenda can be ruthlessly redirected by current events."

That is the reason why the President considers a peace accord with the separatist Moro Islamic Liberation Front (MILF) as a "defining moment" of her presidency, the newsweekly said.

"It is not only political: the economy can’t boom without it," Time quoted the President as saying in an interview.

With the economy improving and with the prospects of peace in Mindanao looking brighter, the President’s approval rating in one survey last June jumped to 46 percent, from a paltry 34 percent three months earlier, the newsweekly said.

Time said that although the President has said that she is not running in next year’s elections, "she is certainly not idling."

President Gloria Macapagal-Arroyo today awarded the Order of Sikatuna to three outgoing ambassadors to the Philippines in simple ceremonies held at Malacaņang.

The Order of Sikatuna with the rank Datu was presented to Ambassadors Irit Ben Abba of Israel, Theo Arnold of the Netherlands, and Gholamreza Yousefi of the Islamic Republic of Iran.

The Presidential citations were given to the three foreign dignitaries for their worthy and able representation during their tours of duty in promoting friendly and warm relations in the field of economic, political and cultural cooperation.

Ambassador Irit Ben Abba said she learned a lot and was impressed by the Filipinos during her three-year tour of duty here. She also told the President of the Israeli government’s continued support to the Philippines, particularly in promoting economic cooperation between the two countries.

Ambassador Arnold, who has been here for almost five years, said he was pleased with the continuation of the peace process. He said there is a great willingness on the part of the Dutch government to do something helpful about it.

He also informed the President that one of the top corporations in the Netherlands is interested in putting up a $600 million a year export industry here. He said the corporation could hire around 5,000 workers.

Ambassador Gholamreza Yousefi said there is a great potential for economic cooperation between the Philippines and his country that could become an alternative source of crude oil.

President Gloria Macapagal-Arroyo today named the three other members of the commission to investigate the roots of the Makati rebellion as she swore in retired Supreme Court Justices Florentino Feliciano and Minerva Gonzaga-Reyes as chairman and member of the fact-finding body.

The new members of the commission are Fr. Joaquin G. Bernas, S.J., retired Commodore Rex C. Robles and Captain Rex Banjo Q. Bumanlag of the Philippine Army.

Fr. Bernas was one-time provincial of the Society of Jesus in the Philippines and dean of the Ateneo de Manila University Law School. A noted theologian and constitutional expert, he is one of the framers of the 1987 Constitution.

Retired Commodore Rex Robles is one of the founders of the Reform the AFP Movement (RAM) which spearheaded the EDSA People Power Revolution, in which he also took part.

The sixth member of the commission is Professor Carolina G. Hernandez.

During their oath-taking, the President Arroyo thanked Justices Feliciano and Gonzaga-Reyes for not hesitating in accepting their new task in the government service.

Justice Feliciano said after their oath-taking at the Malacaņang Study Room that the investigation procedure of the commission is basically laid down under Administrative Code of 1987.

Feliciano said the commission will be impartial, independent, just and fair in its evaluation of the case.

Justice Gonzaga-Reyes, who had just arrived yesterday morning from her a vacation in Europe, said she is elated to be part of the commission.

The two retired justices reiterated that they will not impose a deadline for the completion of their investigation, adding that it is too early to set down rules and decide whether a public hearing is necessary.

"We want to do it as quickly as possible but we won’t impose a deadline yet. Administrative Order No. 78 does not specify any deadline," the justices said.

Under AO 78 issued today by the President, the Commission is granted the power of an investigating body under Sec. 37 of the Administrative Code of 1987, including the power to summon witnesses, administer oaths, take testimony or evidence relevant to the investigation.

The Commission is tasked evaluate all the facts and circumstances surrounding the rebellion, its roots, and the provocations that inspired it, and submit its findings and recommendations to the President.

Presidential Deputy Chief of Staff Renato Velasco today said that it was President Gloria Macapagal-Arroyo who did her best to peacefully resolve the short-lived mutiny by young military officers at Oakwood Hotel in Makati City last Sunday.

In a press briefing in Malacanang this afternoon, Velasco took exceptions to the claim of opposition Sen. Gregorio Honasan during a privilege speech last Tuesday that he was the one who played an important role in the peaceful resolution of the incident.

"But that credit belongs first to President Gloria Macaapagal-Arroyo who welcomed, and, in fact, initiated, various moves for a peaceful resolution of the volatile situation before the deadline," Velasco said.

Velasco said that one of the President’s initiatives at the height of mutiny was sending his close-in security, Capt. Cris Magdangal, who was a classmate of the mutineers at the Philippine Military Academy, to talk to them.

As a result of the initial negotiations, Velasco said Magdangal was able to convince about 40 rebel soldiers to immediately surrender and leave Oakwood while the President contacted some relatives of the mutineers.

Velasco also denied that he called Senator Honasan or initiated a meeting with him as the lawmaker claimed in his speech.

"I did not call Senator Gregorio Honasan nor initiate our meeting. He was the one who called me, notably after the surrender of over 50 rebel soldiers," Velasco said.

Velasco, however, admitted that he, along with Presidential Chief of Staff Rigoberto Tiglao, Presidential Management Staff Head Silvestre Afable, Jr. and Chairman Michael Defensor of the Housing and Urban Development Coordinating Council, went to Mandarin Hotel in Makati City to meet with Honasan.

During their meeting with Honasan, Velasco said the senator professed no involvement in the mutiny and offered to talk to the mutineers. Later, he and Secretary Defensor accompanied Honasan to talk to the rebel soldiers inside Oakwood.

Also present during the meeting with the mutineers were Senators Rodolfo Biazon and Vicente Sotto.