Quotes of the Day

Gloria Macapagal Arroyo is a big believer. The 58-year-old President of the Philippines believes in the Lord Almighty God: she attends Mass most afternoons in a chapel in Malacañang Palace, then retires to her bedroom to pray alone before taking a short nap. Arroyo also believes in legislation, the transforming ability of government, and the power of leadership—her leadership. "I am the agent of change," she told TIME in an interview last week. "I wish to be remembered as the one who made the tough decisions to turn the economy around, to get its act together ... Maybe that's why the Lord put me here at this time."

After four rocky years as President, Arroyo needs her faith as never before. She gained the office after a People Power-style revolution ousted predecessor Joseph Estrada; three months later, angry crowds of enraged, impoverished Estrada supporters descended on the palace to dislodge her, only to be fought off by soldiers firing at the protesters, killing several. A minor coup attempt in 2003 suggested that she wasn't fully in control of her own military. After Arroyo won the presidential election in May last year, the Philippines came close to a financial meltdown—its revenues were too low, its $54.8 billion in foreign debt too high. When the nation's credit rating was downgraded, Arroyo, a former professor of economics, took the threat seriously. She started raising taxes—which has led to a renewed drumbeat of popular protest, persistent rumors of a potential coup, public calls for her to step down, and an unusually acute sense of gloom, even for a country that perennially views the glass as being perilously empty. "Things couldn't get worse," says Alberto Lina, the Philippines' Customs Commissioner. Norberto Gonzales, Arroyo's National Security Adviser, agrees: "We are at our lowest point. Our people will not move unless some changes are introduced."

Arroyo believes she is bringing those changes to the Philippines. Last month, after prolonged horse trading in Congress, her central fiscal initiative was made law: a 10% value-added tax (VAT) that will raise badly needed cash for the government. Without it, Arroyo says, the country would be doomed to "coasting along and hoping that we will not become another Argentina." With it, the government can spend on social services and development and, according to the President, make a lasting dent in the Philippines' crushing poverty. But these changes require Filipinos to endure pocketbook pains. Arroyo admits the gains will take time to be felt by the masses, and acknowledges they are anxious for quick relief. "They are impatient and I am impatient," she says.

Legislators and technocrats have applauded Arroyo for attempting to dig the Philippines out of its fiscal hole. Whether that will pull her out of her own political crater is uncertain. Arroyo's approval ratings have hit rock bottom. A survey released last week by independent polling organization Social Weather Stations showed that 59% of the populace was dissatisfied with her performance, the lowest score for a President since dictator Ferdinand Marcos was overthrown in 1986.

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.

• Anthony Spaeth | Manila
• Faced with plunging popularity, economic woes and a brewing corruption scandal, President Arroyo wants to prove that she can lead the Philippines to salvation