Philippines' Arroyo pleads not guilty in poll fraud trial

By Manuel Mogato

MANILA (Reuters) - Former Philippine President Gloria Macapagal Arroyo pleaded not guilty on Thursday to electoral fraud on the first day of a trial seen as a landmark test of the government's ability to tackle entrenched corruption in the Southeast Asian nation.

Arroyo, a 64-year-old who ruled the Philippines from 2001 to 2010, sat quietly beside her husband and son during the court proceedings, only speaking out loud to confirm her widely expected plea.

"Not guilty," she told the court, standing from a second row seat behind government prosecutors and her lawyers after charges against her were read.

Arroyo's trial, which could see her sentenced to life in prison, is central to President Benigno Aquino's pledge to tackle endemic graft that threatens to take the shine off an economic revival and investment rebound in the Philippines.

Aquino is also pushing the Senate impeachment of the country's Supreme Court chief, Renato Corona, who was installed by Arroyo and is accused of protecting her from investigation.

The trial could be a source of political friction for months or even years if past high-profile Philippine corruption cases are any guide. The trial of Arroyo's predecessor, Joseph Estrada, lasted six years from 2001-2007 before he was convicted of plunder and sentenced to life imprisonment in 2007. Arroyo pardoned him two weeks later.

The landmark cases come as Aquino rides high approval ratings and pledges to go beyond the usual half-hearted efforts to stamp out corruption that pervades public life, keeping tax revenues low and hurting efforts to alleviate poverty.

"ONE STEP CLOSER"

The presidential palace said in a statement that the start of the trial brought the Philippines "one step closer towards attaining closure to the many controversies that have hounded our country during the previous administration."

The court set a preliminary hearing on April 19, which Arroyo is not required to attend. Arroyo, wearing a white dress suit and neck brace following two spine surgeries last year, smiled and posed for photographers while inside the courtroom.

"She is frustrated," Jose Miguel Arroyo, her husband, told reporters. "She feels it's an injustice to her."

Prosecutors accuse Arroyo of ordering her allies, including those in the country's election commission, to fix the victory of all her party's 12 senatorial candidates in a Muslim province in the southern Philippines in 2007 elections.

Arroyo also faces separate corruption investigations for her alleged role in the misuse of public funds and kickbacks from a multi-million telecommunications deal with a China's ZTE Corp <000063.SZ>. The public broadband deal was aborted in 2008.

She denies all the charges.

Authorities stopped the former leader at Manila's main international airport in November as she was on her way to board a plane for overseas treatment of her spine condition. She was arrested days later at a private hospital in Manila.

Dozens of Arroyo's supporters gathered outside the courtroom in a peaceful protest on Thursday, holding placards and banners. "We will not abandon you," one said.

They tried to march towards the court building, but a phalanx of anti-riot police officers stopped them. About 400 police officers guarded the court building and a major national road was closed to allow easy access for Arroyo's convoy.

(Reporting By Manuel Mogato; Editing by Rosemarie Francisco and Stuart Grudgings.)