Salceda made GMA laugh, WikiLeaks reports

MANILA, Philippines - Former President Gloria Macapagal-Arroyo’s economic adviser, who called her a “lucky bitch” in 2008, claimed to be among the few who could get on her good side and make her laugh.

A US diplomatic cable published by the whistle-blowing website WikiLeaks said over dinner on Feb. 5, 2007 with then US embassy Economic Counselor Robert Ludan and Philip Ingeneri, EAP/MTS desk officer for Philippine economic issues that Salceda is one of the most informed economic thinkers in Philippine politics.

His background includes periods spent in Europe as a financial fund manager for SBGC Warburg and Barings Securities, and he is one of the leading economic advisers of President Arroyo.

Salceda said he resisted entreaties to run for the Senate in the May 2007 elections, and would instead join the Arroyo administration.

“He confirmed that he has been one of Arroyo’s closest economic advisers, and has a strong personal relationship with the President. He claimed to be among the few who can get on the President’s good side and ‘make her laugh’ – usually with his biting cynical wit,” the cable sent by former US ambassador Kristie Kenney said.

Salceda said he would limit his stint in the administration to 18 months and then go to Wall Street “where the money is.”

One of his staffers confirmed later that Salceda had accepted Arroyo’s offer of the position of chief of staff being vacated by Michael Defensor, who was running for the Senate.

The President’s office publicly announced Salceda’s appointment on Feb. 9.

The discussion between the embassy official and Salceda was wide-ranging, covering numerous economic and political themes.

Questioned about the prospects for continued economic liberalization, Salceda argued vigorously for a greater opening of the economy, but expressed disappointment with what had been accomplished so far.

He said he had had much higher hopes for the Arroyo administration, but its poor relationship with the Senate had limited its effectiveness.

He expressed the hope that the Philippine government and the United States would be able to negotiate a bilateral free trade agreement (FTA) before the end of Arroyo’s term in 2010.

“When we noted that negotiations for an FTA would require liberalization of constitutional provisions that limit foreign investment in large parts of the economy, Salceda replied that such changes would be politically impossible,” the cable said.

“He expressed his support for an FTA with the US, but said the Philippines will not be able to make the constitutional changes which would be necessary to reach such an agreement.”

Salceda, former Albay congressman and economics student of Arroyo at the Ateneo de Manila University, told the embassy official that he expected economic growth to spike over the next two years as a result of fiscal reforms and the increased ability of the government to spend.

However, according to Salceda, after a short burst of growth the country would return to its usual “muddling through,” the cable said.

The structural problems of the Philippine economy, according to Salceda, had not been dealt with and would continue to constrain growth.

He estimated that 80 percent of corruption in the fiscal sector translates into reduced revenues while the 20 percent represents diverted expenditure.

Salceda said increased spending, though, would increase corruption on the expenditure side. Monitoring and oversight will be critical to ensuring that taxpayer funds deliver infrastructure, growth, and jobs.

Salceda, incumbent Albay governor, apologized to President Arroyo through a text message after realizing his “lapse in judgment.”

He explained that what he meant when he called the President a “bitch” and keeping herself in power during a public forum at the Ateneo Graduate Schools was maintaining control despite her unending political woes.

The President was known for her short temper.

In April 2009, Salceda joined staunch Arroyo critic, the Liberal Party (LP) of presidential aspirant, now President Aquino, who was his classmate at the Ateneo.