Philippine government suspends $329 million broadband deal

A cabinet official has announced that the Philippine government is suspending a $329-million broadband network contract with ZTE, a unit of China's biggest listed telecommunications equipment provider.

The official said President Gloria Macapagal-Arroyo told him to do it. No explanation was given as to why the President ordered the suspension of the project, which was supposed to be funded by a loan from the Chinese government.

But we can look at some sort of connecting facts:

The suspension came two days after the Senate started investigating the contract to build a national broadband network to connect all government offices. Senators wanted to know if the president's husband cleared the way for ZTE to get the contract.

There was a failed attempt by some disgruntled soldiers to mount a possible coup d'etat against the administration.

The son of the speaker of the Philippine congress' lower house. on Tuesday testified before a senate investigation of the contract that the president's husband, Mike Arroyo, told him to back off from the project. The son, Jose de Venecia III, is offering to build the network through his company at no cost to the government.

De Venecia also charged that the head of an elections agency asked for kickbacks from the contractor that bloated the price and that the same official offered him a $10-million bribe to withdraw his company's proposal for the project.

Transportation and communications secretary Leandro Mendoza defended the contract in another senate hearing on Thursday. Mendoza also denied de Venecia's accusations against elections chairman Benjamin Abalos and Arroyo.

Just another day of politics in the Philippines. It will all sort itself out, eventually. And, yes, that is George Bush with Gloria Macapagal-Arroyo seen from the rear. It makes him look very tall.