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March 12, 2008

Arroyo vows to pass anti-graft law

Philippine President Gloria Macapagal Arroyo, under pressure from a bubbling graft scandal, said on Tuesday she would ask Congress to pass an anti-corruption reform act this year, Reuters reported.

"On our part, we will hold officials accountable, if they are found to be corrupt after due process," Arroyo told cabinet members and lawmakers in a ceremony to sign this year's 1.2 trillion peso ($29 billion) budget.

Arroyo has faced calls to resign after witnesses in a Senate inquiry alleged a $329 million telecoms deal between the government and Chinese firm ZTE was overpriced by $130 million to fund kickbacks. Arroyo's husband was also named in the probe. Mike Arroyo has denied any wrongdoing.

Analysts say the president, who has already survived three impeachment bids and at least three coup attempts, is likely to see out the remainder of her final term ending in mid-2010, because she has the support of the military and many Filipinos want stability.

But to appease critics and keep powerful Catholic bishops on side, Arroyo has lifted a gag order on government officials testifying at the Senate probe and said on Tuesday that projects and state procurement plans would be scrutinised.

Spending on infrastructure will rise 22 percent this year to 113 billion pesos as Arroyo seeks to upgrade the country's crumbling network of roads, bridges and underfunded hospitals and schools after years of belt-tightening.

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