How to explain the disconnect between a President proud of her achievements and a population that feels the reverse? Higher prices—and they're about to get even higher when stores start collecting the VAT next month—are only one factor. "It's a stretch to say this is the worst time," says Guillermo Luz, executive director of the Makati Business Club, the country's premier business association. "But people had expectations of Gloria—bigger and better expectations, especially after the 2004 election. The question of her mandate was settled and it was time to move forward. Those expectations haven't been met, and that's why people are so disappointed." Four respected Cabinet members resigned from the government earlier this year, and there's a palpable sense that the country needs less presidential self-congratulation and more bold action on such problems as the Philippines' out-of-control birthrate, 11.8% unemployment, 5.5% inflation, and systemic corruption. The same Social Weather Stations survey said that businesspeople believe graft in the government is as widespread as ever before. That's a very touchy subject for Arroyo: her husband, son and brother-in-law are being investigated by the Senate over allegations (which all three have denied) that they may have received money from an illegal lottery racket called jueteng, which is popular in many parts of the Philippines. (Similar accusations of payouts from jueteng rackets led to an impeachment trial and the overthrow of Estrada.) Arroyo is handling that brewing scandal by distancing herself from her family, telling Time that her greater responsibility is to her country: "They will take care of their own defense ... I am very, very focused on my work."

During her four years in office, Arroyo has vowed to address the nation's woes with an eight-point program, a six-point plan, a five-point reform scheme, and now a 10-point agenda that includes a perhaps overly ambitious lineup of goals: job creation, balancing the budget, improving power and water access to everyone, computerizing elections and decongesting Manila. No taxpayer can complain that her public relations staff is underworked. Tanker trucks cruise Manila distributing free water to poor neighborhoods; Arroyo's face smiles from a banner at their rear above the slogan "GMA's Love For You." Stores selling government-subsidized rice display placards telling impoverished buyers that GLORIA CARES. Arroyo won her presidential election 13 months ago and she cannot run for office again when her term expires in 2010, but she's still campaigning.

Arroyo, as befits an economist, describes the Philippines as being in a U-shaped slump that will be cured by her fiscal reforms. The biggest measure was the VAT, which will charge consumers on purchases of most goods (except fresh food, including rice). Perhaps only an economist can see a country's salvation in such a tax, but even Arroyo's political foes admit that she solved a big Philippine problem. They acknowledge that any accomplishment, even such an inherently unpopular one, shows that the President is attempting to act decisively. "I think she's more stable now," says Senator Juan Ponce Enrile from the opposition camp.

In the poorer reaches of Manila, there is a resigned sense that life will continue to be a struggle, regardless of what the politicians promise. Ness Badillo, 30, is one of the drivers who deliver the free water in trucks adorned with Arroyo's face. He makes up to six trips a day, earning about $2.20 per trip. "Times are hard and prices are going up," he says. "But it's the same for everybody. I'm lucky because my wife is working. We can feed our two kids and send them to school. But it's hard to improve your life." Badillo voted for Arroyo last year. Does he believe she's doing her job? "All of us should strive, not just Gloria," he says. "No one person can solve our problems." Perhaps. But Arroyo, for one, still believes in her God-given power to save the nation.

With reporting by Nelly Sindayen/Manila

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	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