Arroyo needs all the divine intervention she can get. Two and a half years after being catapulted into office via a People Power revolt on the avenues of Manila, the diminutive former economist faces her own insurrection on the capital's streets: over the weekend, a band of rogue soldiers abandoned their posts and marched to Manila's financial district, where they set explosives, seized a service apartment complex and forced the evacuation of at least one five-star hotel. It wasn't exactly a coup attempt—the soldiers said they were teed off at corruption in the military and also charged elements of the military with providing weapons and explosives to terrorists—but for the stability-challenged Philippines, that was hardly reassuring. Attempted coups were the bane of the Philippine leader Arroyo most resembles: Corazon Aquino, the ex-housewife who toppled late strongman Ferdinand Marcos in the original People Power revolution of 1986. Aquino survived seven such putschs. This is Arroyo's first brush with an unruly barracks.
The relentless Philippine rumor mill had been working overtime all last week churning out allegations that a coup was imminent. Arroyo herself on Wednesday dined at the palace with openly disgruntled mid-level officers. Later she visited a military training camp. The troops, apparently, were never mollified. On Friday, a small group of younger officers at navy headquarters on Roxas Boulevard went AWOL, taking their men and their weapons with them. (The government says there were no more than a dozen officers, with perhaps 50 enlisted men following them.) Arroyo was alerted on Friday afternoon. "Should we make the mutiny public?" she asked her assembled Cabinet. "The general feeling was to let the public know at once so that whatever plans the coup plotters had would be nipped in the bud," relates one Cabinet minister. Arroyo decided to employ Jaime Cardinal Sin, Archbishop of Manila and hero of the original People Power revolt, who released a pastoral letter on Saturday saying that a coup was in the works and that the citizenry should rally around Arroyo. Early Sunday morning, the band of soldiers marched into Makati and started laying explosives around a central parking lot. They later took over the The Oakwood Premiere, an upscale service apartment building (and home to the Australian Ambassador to the Philippines, Ruth Pearce, who was evacuated Sunday). In a televised statement, the group demanded that Arroyo's government step down, but went on to gripe about low pay and corruption among senior officers.
Until the mutiny in Manila, Arroyo saw her biggest challenge in the country's south, where she describes the possibility of striking a deal with the Moro Islamic Liberation Front (MILF) as "a defining moment" for her presidency. Talks are scheduled to begin in Kuala Lumpur on Aug. 8. Peace, she told TIME correspondents during an interview in a dim study within the sprawling Malacaņang Palace "is now within grasp." The U.S. is strongly backing the talks and has promised $30 million in development aid for Mindanao, the southern island at the center of the MILF insurgency, if a peace deal is inked. Though admitting the need for caution, the U.S. Ambassador to the Philippines, Francis Joseph Ricciardone, says, "the stars are in alignment for a workable and genuine peace."
It would certainly be a sterling achievement. But a TIME investigation (see following story) shows that a deal with the MILF could be more risky than Arroyo admits publicly. The MILF is not the only troublemaker on that island. For decades, international terrorists—including Osama bin Laden's al-Qaeda and members of Jemaah Islamiah (JI), the Southeast Asian terror gang thought to be responsible for the Bali bomb blasts of last October—have used Mindanao for weapons and bomb training. Arroyo's negotiations with the MILF separatists, who have called for an independent Islamic state, might do nothing to rid the Philippines of jihadis who want to blow up embassies and attack Western targets. The escape last month of Fathur Rohman al-Ghozi from a military jail in the middle of Manila was a reminder of JI's reach. Al-Ghozi trained with the MILF, but his allegiance is to JI. He was arrested for possessing one ton of TNT and confessed to carrying out a bomb blast in Manila that killed 22 and injured more than 100 on Dec. 30, 2000. Al-Ghozi was almost certainly sprung from jail with inside help; three weeks ago, Arroyo announced that she would form a commission to undertake a total overhaul of the national police.