By Manny Mogato
MANILA (Reuters) - Philippine President Gloria MacapagalArroyo was described as "evil" in a Senate inquiry intoofficial corruption on Monday, the most personal attack yet ina spiralling scandal.
The inquiry, into allegations of bribery in a telecomsdeal, has prompted renewed calls for Arroyo's resignation andsparked the biggest protests since 2005, when tens of thousandsof people demonstrated against her amid accusations of electionfraud.
Rodolfo Lozada, the probe's star witness, told senatorsthat Romulo Neri, Arroyo's former economic planning chief, hadwanted to resign due to controversy over the state's $329million (168 million pound) deal with China's ZTE Corp, whichwas allegedly overpriced by $130 million to fund kickbacks.
"He called President GMA evil," Lozada, a former seniorgovernment official, said in emotional testimony. "He's beenagonising over it."
Asked why Neri wanted to resign, Lozada replied: "Becausethe president has lost all moral authority over him."
Neri said he couldn't recall such a comment about Arroyo.
"I can't remember that statement," he said at a newsconference at the presidential palace. He said like allgovernment employees he had sometimes considered resigning.
"We are all victims of the oligarchic structure of thePhilippines," he said.
Analysts say Arroyo's position remains secure because thepowerful Catholic Church has not called for her to go and shehas the support of the military and the lower house ofCongress.
She has already survived three impeachment bids and atleast three coup plots and her final term runs out in mid-2010.
Middle-class Filipinos, sometimes referred to as the "SUVcrowd" for their preference for expensive sports utilityvehicles, have, however, started to join small protests.
Last week, around 10,000 people demonstrated in Manila'sfinancial district and opposition groups are planning furtherrallies, particularly on February 25, the anniversary of theoverthrow of dictator Ferdinand Marcos.
The government said on Monday that February 25 would be aholiday for workers, potentially reducing turnout at rallies bygiving people a long weekend to spend with friends and family.
A JOB TO DO
More than 50 former top government officials, including anex-central bank chief, urged Arroyo's cabinet to quit onSunday.
But her officials said they were sticking by her.
"As far as we (the economic team) are concerned, we have amission to accomplish," said Finance Secretary Margarito Teves.
On Monday, the peso finished at 40.67 against the dollar,stronger than Friday's close at 40.755, but the main stockindex bucked the regional uptrend to finish down 0.62 percent.
Under pressure from Lozada's revelations, country'santi-corruption agency, finally opened its own inquiry onMonday into the ZTE deal, which Arroyo was forced to cancellast year.
Unlike the Senate, the Ombudsman has the power to filecharges against anyone found guilty of graft, but Filipinos aresceptical about its independence because its head, MerceditasGutierrez, was appointed by Arroyo and is a former classmate ofthe president's husband, Mike Arroyo.
Gutierrez inhibited herself from the probe.
"My primary concern is the conduct of this hearing shouldleave no room for doubt," she said.
The president's husband, who has been named in thecorruption scandal, failed to appear at the Ombudsmaninvestigation.
Neri was also a no-show. The former chief of the NationalEconomic and Development Authority told the Senate last yearthat he was offered a $4.4 million bribe to approve the ZTEdeal.
But Neri, who was moved to an education post in July, hasrefused to testify again at the Senate, saying part of his workwas confidential.
(Additional reporting by Rosemarie Francisco; Editing byCarmel Crimmins and Alex Richardson)
