The Philippines averted a constitutional crisis yesterday after lawmakers backed a Supreme Court ruling that the impeachment of the country's top judge was unlawful.
But supporters of the impeachment were unlikely to heed calls for reconciliation and analysts said any relief from political uncertainty ahead of elections next May may be brief as politicians in the fractious democracy jockey for position.
In a marathon session of the House of Representatives, law-makers voted by 115 to 77 to abide by the court's decision, overcoming opposition from those who wanted to ignore the court and pass the impeachment articles on for a Senate trial.
"This is a historic win for the Filipino people," Philippine President Gloria Macapagal Arroyo said in a statement, after an eight-hour vote that stretched through to dawn yesterday.
"I am confident that the three branches of government can now buckle down to their respective duties unhampered by controversy and uncertainty."
The impeachment of Chief Justice Hilario Davide prompted street protests and divided the country ahead of the elections.
Supporters of ousted president Joseph Estrada backed impeachment, while the Catholic Church and former president Corazon Aquino led rallies against it.
The peso has slumped to near record lows and reforms vital to stop a sharp decline in foreign investment and curb a large budget deficit languish in Congress.
The currency rebounded yesterday to 55.16 pesos to the US dollar from lows around 55.49 pesos on Monday, helped by the apparent end of the crisis, dealers said. Spreads on Philippine sovereign dollar bonds tightened, after blowing out by as much as 15 basis points on Monday.
But domestic debt market yields continued a recent rise and stocks fell to their lowest level in eight days, partly on worries about higher interest rates.
"The worries came up as a combination of several factors," said a local bank dealer. "It's not only the impeachment."
"We are looking at early 2004 with the election campaign, and the budget deficit is still a concern."
The Philippines has been beset by scandals and crises over the past few months, from an aborted coup by disgruntled soldiers in July to allegations of corruption against Arroyo's husband to the impeachment of Davide.
Analysts lay much of the blame on maneuvering ahead of elections that remain very open given Arroyo's relatively poor popularity ratings.