Mrs. Arroyo said, however, the decision should be made by the Sandiganbayan anti-graft court trying Estrada and not by Malacañang, Housing Secretary Michael Defensor told reporters.
Defensor said he had visited Estrada, detained since last year at Veterans Memorial Medical Center in Quezon City in a personal mission to help air his appeal to be allowed to return home and spend Christmas with his family.
"The call to place (Estrada) under house arrest has been gaining momentum, and in my opinion, the former president will not be a problem" for the government, Defensor said.
"In my opinion, the President would want President Estrada under house arrest if it was possible to unite the country," he added .
He insisted he was on a "personal mission" and not acting at the behest of Malacañang. "President Arroyo has nothing to do with this," he said.
Defensor said Mrs. Arroyo seemed to favor house arrest for Estrada, as she has personally monitored his condition while in custody. But she said the decision should be left to the Sandiganbayan trying the case, he said.
Businessmen and influential religious organizations like the El Shaddai and Iglesia ni Cristo have also endorsed "house arrest" for Estrada, toppled in a military-backed popular protest last January and replaced by then Vice President Gloria Macapagal-Arroyo.
Defensor said former President Corazon Aquino has also suggested that Estrada be allowed to spend Christmas at home.
The suggestion was condemned as a "shameless betrayal" of the Filipino people by the Arroyo administration by Plunder Watch, an umbrella anti-graft advocacy group that mobilized thousands of activists in a series of anti-Estrada protests that culminated in his ouster.
"It is nothing but a shameless betrayal by the Arroyo administration which has seen fit to sacrifice the Estrada plunder trial just to improve its popularity ratings," Plunder Watch spokesman Joe Dizon said.
"This house arrest is not about justice because it is simply illegal to grant bail or a reprieve to someone like Erap who is being tried for the non-bailable offense of plunder."
"National unity cannot be fostered through immoral political compromise between the administration and the opposition," Bayan Muna party-list Rep. Crispin Beltran said in a statement.
Estrada is now on trial and is being held without bail for alleged plunder and other corruption charges.
Estrada’s lawyers yesterday formally filed a petition for "house arrest" with the Sandiganbayan on humanitarian grounds. A favorable decision could "soothe and allay the current political tension" between anti and pro-Estrada forces, the lawyers said.
"Allowing the former president to be placed under house arrest will instead pave the way for the dawning upon us of the administration of justice in a humane way, free from the perception of reason being supplanted by passion and that the accused are already suffering the pain of penalty of the guilty when their guilt is yet to be established beyond reasonable doubt," the defense said.
"Viewed from another angle, the favorable consideration of the instant motion will be a rare exercise of a high level of judicial statesmanship by the court for healing the wounds of the past."
The Sandiganbayan had no immediate response on the Estrada petition.
The anti-graft court refused in the past to allow Estrada and his co-accused and son Jinggoy to temporarily leave detention, citing national security concerns. It earlier rejected a bid by Estrada to seek medical attention in the United States for various ailments including gout and eye problems.
In June, the Sandiganbayan turned down his request to vote in their San Juan hometown for the synchronized barangay and youth elections that month.
In late October, the court also refused them permission to visit their dead during the All Saints’ Day and All Souls Day’ holidays.
Despite corruption allegations, Estrada remains hugely popular among the poor, who gave the former movie action star a landslide victory in the 1998 elections.
When he was arrested in April last year, thousands of pro-Estrada supporters rioted and tried to storm Malacañang to reinstall him. Four rioters were killed in clashes as security forces beat back protesters from the gates of the presidential palace. – With reports from AFP, Jose Rodel Clapano, Romel Bagares