By Francisco Alcuaz Jr.

July 27 (Bloomberg) — Philippine President Gloria Arroyo dismissed accusations she will attempt to cling to power when her term expires next year by changing the constitution.

“I never expressed the desire to extend myself beyond my term,” Arroyo said in her annual policy statement. “Many of those who accuse me of it tried to cling” to office themselves, she said, without elaborating.

Any attempt to extend the six-year term would risk stirring the wrath of voters suspicious that her election in 2004 was fraudulent. She may also need to tread carefully before meeting U.S. President Barack Obama in Washington this week. The U.S. backs democracies in Southeast Asia such as the Philippines and Indonesia to counter China’s influence and stem the spread of terrorist offshoots of al-Qaeda.

Arroyo plans to discuss climate change, nuclear non- proliferation and counter-terrorism with Obama, she said. “There is now a good prospect for peace talks” with local communist guerillas and Muslim separatists, she added.

The U.S. is the Philippines’ biggest export market, and the 5.5 million Filipinos working there sent home as much as $7.8 billion in remittances last year. In the 1980s, the U.S. helped push former President Ferdinand Marcos out of office on a wave of public demonstrations and then provided air cover for troops loyal to his successor Corazon Aquino to fend off a coup attempt.

If she attempts to rig the system “and people are morally outraged, they can act powerfully and instantaneously,” said Segundo Romero, a fellow at the Development Academy of the Philippines in Manila. “Whatever she says, she must be able to explain it to President Obama.”

Tax Pledges

Arroyo, 62, pledged to improve tax collection and introduce levies on liquor and cigarettes to pay for increased spending on health, education and infrastructure projects. The country’s economic fundamentals are intact, she said.

Staying in power would enable Arroyo to fend off any legal actions over allegations of vote-rigging, corruption and human rights abuses, Romero said. Her predecessor Joseph Estrada spent six years under arrest after he fell from power and before he was convicted of corruption and sentenced to life in jail in September 2007. Arroyo pardoned him a month later.

Opposition lawmakers have failed in three attempts to impeach Arroyo. She has denied all the allegations.

Supporters of former President Ramos tried to remove the single-term limit during his administration.

Constitutional Moves

Lawmakers in the Arroyo-controlled House of Representatives last month called for an unprecedented joint vote with the smaller Senate to discuss amending the constitution. Senators, outnumbered by House members 10-to-1, oppose changes before next year’s elections and without a constitutional convention elected for the purpose.

“If she steps down, she will open herself to legal challenges,” said Bong Lopez, a political science professor at University of Santo Tomas in Manila. “The opposition will file cases against her. She’s afraid because she put Estrada in prison. What assurance does she have Estrada’s supporters won’t do the same to her?”

“Those who should be in jail should not threaten it, especially if they have been there,” Arroyo said today.

Arroyo is more unpopular than Estrada was at the time of his ouster, according to Manila-based Social Weather Stations, one of the Philippines’ two biggest polling organizations.

Another option open to Arroyo is to revive a 2006 push by her supporters for a shift to a parliamentary system with a prime minister who would take over many of the president’s powers. Such a change would have to be endorsed by the Supreme Court

“It’s a long shot,” said Lopez. “She has to run for parliament” first, he said.

Failing any attempt to keep Arroyo in office, the leading candidates in next year’s election are Senators Manuel Villar, Francis Escudero and Manuel Roxas and former President Estrada, according to Social Weather Stations.

“As the campaign unfolds and the candidates take to the airwaves, I ask them to talk more about how they will build up the nation rather than tear down their opponents,” Arroyo said. “Give the electorate real choices and not just sweet talk.”

To contact the reporter on this story: Francisco Alcuaz Jr. in Manila at falcuaz@bloomberg.net