Addressing the traditional Vin d’Honneur with diplomats, senior government officials, and Cabinet members, the President pledged to pursue constitutional reforms, particularly overhaul the country’s political system, so the economy could move forward.

Also, the President said the government intends to bring the economic gains to the people as well as put an end to the reign of terrorists and destabilizers this year.

"I’ve set an ambitious but achievable plan for 2006 that rests on three strategic objectives: One, build a stronger economy; two, build a stronger republic. We will achieve this by fighting terrorism and destabilization by bringing peace to Mindanao; and three, press for long-overdue political reforms for Charter change," she said.

Among those present in the affair was former President Fidel Ramos, who, early in the day, had declared conditional support for Mrs. Arroyo and said he had turned down offers from the opposition to switch sides.

In their first public encounter since the emergence of rumors that the former leader was dropping support for the incumbent, Arroyo and Ramos shook hands and even stood beside each other during the New Year’s toast.

In her speech, the President emphasized the need to create a "modern Constitution" if the nation wants to build a "modern Philippines" alongside other nations in 20 years.

"I’m pushing for Charter reforms because I sincerely believe it is the last bastion that holds back the nation and keeps us divided and poor when we should be united and prosperous," she said.

The President also called for an end to the country’s rowdy politics which has only derailed economic growth, saying people want "less talk and more action." "A change in politics must be accompanied by change in system of government," she added.

Arroyo said the new Constitution must provide "less gridlock, more local control, greater accountability by the politicians, better service delivery, stronger police protection, less opportunity for official corruption, and more jobs and economic development on the local and provincial level," she said.

The Chief Executive, however, was silent on Ramos’ proposal that she should cut her term to pave the way for a change to the parliamentary form of government next year.

Riding high on the series of strong economic figures, the President said the government intends to deliver "real economic results" to "real people" through better social services and infrastructure projects for the people.

Mrs. Arroyo said she has set aside R35 billion in government savings that would pump-prime the economy in the next few months in the areas of healthcare, education, housing, and food.

"Let me be clear: This is not wild- eyed spending. This is targeted spending within the limits of our fiscal controls and budget plan. We are paying responsibly down our debt while simultaneously building up investments in basic services and infrastructure," she said.

On the security front, Arroyo said her government intends to beat terrorism and destabilization to facilitate better economic growth. She also plans to pursue peace and development initiatives in Mindanao.

"The people are fearful of what the scourges of terrorism and destabilization are doing to their lives and security. I’m determined to bring real peace and real security to alleviate their fears. The next generation deserves to live in peace and harmony," she said.

Arroyo expressed a positive outlook for the country this year, especially with her 2006 agenda for economic growth, peace and order, and constitutional reforms. "It is ambitious, yes, but the people are impatient and eager for progress and so am I," she added.

Papal Nuncio Archbishop Antonio Franco, dean of the diplomatic community, also expressed continued support for the Arroyo government and expressed hope it will overcome its challenges this year.

Unlike past Vin d’Honneurs, Vice President Noli de Castro, Senate President Franklin Drilon, and House Speaker Jose de Venecia were absent in the affair.