Arroyo ends state of emergency in Philippines

MANILA, Mar 3 (Reuters) President Gloria Macapagal Arroyo ended a week-old state of emergency in the Philippines today, as widely expected, after her security chiefs said the threat from coup plotters had receded.

Two small bombs exploded in Manila about 75 minutes before Arroyo's taped announcement was broadcast, briefly raising fears that the president might extend emergency rule.

There were no casualties or major damage from the blasts near the headquarters of an elite police team and a shopping area in the upmarket Ortigas district. Police said the explosions were caused by crude devices and were no cause for alarm.

''I firmly believe that order has been restored,'' Arroyo said on radio and television. ''I declare that starting now, the state of emergency no longer exists.'' Financial markets had priced in an imminent lifting of the emergency order but were rattled slightly by the blasts.

The peso weakened to 51.26 per dollar from 3-1/2-year highs around 51.13 before recovering to 51.19. The main stock index closed 0.34 per cent lower.

''I don't see these political events having that much impact,'' said George Worthington, chief economist for Asia-Pacific at IFR Thomson Financial.

''Was this a ploy to shore up Arroyo's support? There could be a number of scenarios that could be the cause. Unless there is a successful coup, the market tends to shrug these things off.'' Arroyo, who survived an impeachment attempt last year over allegations of vote-rigging and graft, invoked the emergency last Friday to confront what she said was a conspiracy of opposition foes, communist groups and ''military adventurists'' to oust her.

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