Philippines' Aquino urges legislators to pursue reforms

By Rosemarie Francisco MANILA (Reuters) - Philippine President Benigno Aquino on Monday laid the groundwork for next year's polls, urging Congress to persist with reform efforts that targeted graft and led to a peace deal with Muslim rebels. Aquino, barred by law from a second term, is likely to announce this week Interior Minister Manuel Roxas as his party's candidate for the May 2016 election, even if surveys show he has little support. "The next election will be a referendum for the 'Straight Path'," Aquino said in his final state of the nation address before stepping down next year after a six-year term. "You decide if the improvement we are now enjoying will become permanent, or will be considered just luck and a momentary recovery from a long history of failure," he said. On Aquino's watch, the economy grew an average of 6.3 percent, the best 5-year record in four decades. But growth slowed to 6.1 percent last year, and could be further dampened by worries over the changing of the guard in 2016. Critics also say few jobs were created. The Philippines raised revenues to record levels by fixing tax leakages and cutting red tape, leading credit rating agencies to raise its debt to investment grade status. Now Aquino, the son of two Philippine democracy heroes, including former President Corazon Aquino, wants to ensure his policies endure. He stopped short of endorsing Roxas, the interior and local government secretary, as presidential candidate, but said critics sought to put him down because he was competent. "In their continued efforts to discredit you, your critics have proven that they are afraid of your integrity, skill, preparedness for the job," Aquino said in a speech lasting more than two hours. The polls will pit Roxas, who faced criticism over government mishandling of relief efforts after supertyphoon Haiyan left nearly 7,000 dead or missing in 2013, against Vice President Jejomar Binay, who is battling graft charges. Roxas ran for vice president in 2010 but lost to Binay, who topped surveys for presidential candidates until recently. Aquino asked Congress to pass an autonomy law on governance rules for the country's south after a peace deal signed last year with the largest Muslim rebel group. Other bills concerned fiscal incentives for new investors and reforming the pensions of military and security personnel. But Aquino has his critics. "Burden to workers" read a banner unfurled by three left-wing congressmen after his speech, while outside Congress, police used water cannons to disperse about 4,000 people protesting against his labor policies. (Additional reporting by Manuel Mogato, Karen Lema, Erik dela Cruz and Neil Jerome Morales; Editing by Clarence Fernandez)