Interview
	"Family Comes Last"

Posted Monday, June 6, 2005; 20:00 HKT
In a candid two-hour interview in Malacañang palace, Philippine President Gloria Macapagal Arroyo spoke with Time's William Green, Anthony Spaeth and Nelly Sindayen on June 1 about poverty, fixing the economy, and how she's coping with corruption accusations against her family. Excerpts:

TIME: What are your most pressing concerns?
ARROYO: Poverty is the moral imperative of the times. That's what drives my soul, that is the center of my administration. We've finished Phase 1 of my economic reforms: greater generation of government revenues. We can use the revenues to [fund] long-overdue social-justice reforms. As a result of these efforts, including running after tax cheats, we had the highest increase in tax collections last April, we achieved our budget surplus on a monthly basis for the first time in many years, and Fitch Ratings upgraded our [credit] outlook. Phase 2 [involves] spending on long-needed infrastructure, for the good of the people and for the good of investors ... History will judge us for these years of making these tough choices, for the years that we got our act together and turned the economy around so that we can go on a path of sustainable growth.

TIME: How important was it to introduce a value-added tax?
ARROYO: It had to be done, even at the expense of my own political capital ... I wish I had a magic wand so that fiscal reforms could be painless, and that we would have instant gratification. But, regrettably, realistically, it does not work that way.

TIME: What would have happened if you hadn't bitten the bullet?
ARROYO: A succession of downgrades. [Now,] with our big foreign debt, I was able to extend the payment of a lot of our debt. That is why even though we have a high debt-to-GDP ratio, less than 15% is payable within the next five years. In fact, we paid some of [that] debt in the first quarter of this year. But if we did not do that then we would have had successive downgrades so we would be paying much, much higher interest rates. Then we would not have had anything left for anything else—infrastructure, social services. It is the Argentina scenario that could have happened.

TIME: How do you address the problem that foreign investors still perceive the Philippines as a very risky place?
ARROYO: They [feel] this is not a good place to do business because of so many things, whether it is a perception or reality. For instance, the reality is that we do not have enough infrastructure; I am working on that. If the reality is that we have a lot of red tape, I am working on that. If the reality is that there is corruption, I am working on that too. We are ready to make the tough decisions.

TIME: What is the Philippines' biggest security risk?
ARROYO: The military tells us that it is still terrorism. Jemaah Islamiah is an international threat, and we have to fight them militarily and also in conjunction with our neighbors, and also fight poverty in the places where they can recruit their supporters ... We have to be vigilant every day—we have to kill, maim, disarm any terrorist that comes to our shores.

TIME: How are you and your husband and son coping with the accusations of corruption against them?
ARROYO: My husband is very much upset, because he is very misunderstood. For my son—well, this is a shocker for him. It is an introduction to Politics 101 ... It is important that there be a correct investigation. Nobody is above the law. Let the chips fall where they may. They will take care of themselves, they will take care of their own defense. I am not engaged in the investigation; I am very, very focused on my work, like a laser beam on the fiscal reforms. My father [Diosdado Macapagal, who was President from 1961-65] used to advise me: when you are a public servant, the priority is God first, then country; family is last. So I have to be a wife last. My attitude is that family comes last.

TIME: It must be very trying for you.
ARROYO: My father said the presidency is not a position to be enjoyed. It is a position where you have to work hard and you have to suffer if need be for the good of the people.

TIME: What keeps you going during difficult moments?
ARROYO: Faith and trust in divine providence. Being a President is a lonely job. Most of my relationships are institutional rather than informal. So I pray constantly, and when things are difficult, I tell God, "You put me here, and you have got to solve this problem ..." God is my best friend. I share my problems with him.

	Whispers of Change [May. 09, 2005] Philippines President Gloria Macapagal Arroyo must face protests and rumors of a coup plot Under the Gun [May. 02, 2005] No country in Asia has as many internal security problems. But its armed forces lack the funds and equipment to meet the threats, which fuels restiveness—and coup attempts Going For Broke? [Aug. 18, 2004] Chronic unemployment, a yawning deficit and uncollected taxes are sinking the Philippines Is She The One? [May. 07, 2004] Will Filipinos vote for their brainy but aloof President—or anoint a popular movie star who offers nothing less than salvation? Power and Gloria [Jun. 18, 2001] The Abu Sayyaf have started killing hostages, but Philippine President Arroyo is standing firm More Related Items | Search all issues of TIME Magazine