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All this has created 4.4% economic growth—still, economists say, the Philippines needs to surpass 7% to reduce poverty and absorb additional workers resulting from the country's high birthrate. Central bank governor Rafael Buenaventura says the economy "is a diesel engine rather than turbocharged." Ask members of Arroyo's economic team what's holding the economy back, and they unanimously cough up one word: security. The bombings and insurgencies that are a common part of Philippine life suppress investment and force the government to redirect scarce resources away from economic stimulus programs. Last week's attempted coup is an example of how the government's agenda can be ruthlessly redirected by current events. That's why Arroyo considers an MILF peace deal a "defining moment." It's not only political: the economy can't boom without it.
During Arroyo's meeting with TIME, she ticked off the major problems facing her administration—corrution, drugs, poverty, and one of Southeast Asia's worst terrorism threats—a list that loomed even larger than her giant wooden presidential desk and didn't yet include the Makati siege. "I inherited a complex nation with complex problems," she said. "And I came in realizing there is no silver bullet."
Arroyo has only 10 more months in office after vowing last December to forswear a campaign to regain office. (She said at the time that God had approved her decision.) In fact, after 30 frustrating months—and before last weekend's mutiny—Arroyo seemed to be getting some purchase on the levers of power. There were the promising peace talks with the MILF. Four officials suspected of corruption in the revenue and customs bureaus were smoked out last week and are being investigated—the latest objects of a growing campaign against corruption. The economy is slowly improving, too. With such successes, Arroyo doesn't look like a politician ready to leave office next year—especially since her chances of winning keep improving. Her approval rating in one June survey jumped to 46%, from a paltry 34% only three months earlier.
Arroyo may say she is not running, but she is certainly not idling, either. Last Monday, she marched into a meeting of her economic team focused on how to spend assets won in a lawsuit from the estate of disgraced and deceased former President Ferdinand Marcos. Glasses pinched at the end of her nose, she pored over the specifics like a full-time accountant. "She knows our jobs better than we do," joked Trade Secretary Mar Roxas. The next day she was off to some provinces near Manila. In a speech at a spartan hall in the town of Santa Cruz, she exhorted recruits to a police-sponsored community-watch program to fight drugs and terrorism, and promised "to leave no stone unturned" in the hunt for al-Ghozi. She sure looks like a candidate on the hustings, and political analysts admit that another Arroyo administration is looking more attractive. Still, in a country where elections are more popularity contests than policy debates, the stern Arroyo is given even odds—at best—to win if she decides to run. Arroyo is insistent she can be more effective without worrying about a campaign. "I don't want to be distracted by politics," she tells TIME. At the same time, she admits that turning around a troubled nation like the Philippines isn't done in a hurry. "It's not a sprint," she says, "it's a marathon." Her distractions now transcend the merely political, as the latest mutiny reminds us of the fragility of the Philippines' democratic institutions.