MANILA (Reuters) - The Philippine government has given partners of a joint venture that won a $150 million bid to automate next year's elections until Friday to patch up their differences, the elections commission chief said on Tuesday.
Jose Melo, chairman of the Commission on Elections (Comelec), had said on Monday the election automation plan was likely to be scrapped because the local partner, Total Information Management (TIM), had differences with Barbados-based Smartmatic Corp.
Comelec officials and representatives from TIM and Smartmatic held a meeting on Tuesday, after which Melo told reporters:
"It all boiled down to control of money. We emphasised to them there was an agreement. We (told them we) will give you until Friday or earlier for you to come up with whatever you can."
Lawmakers, political groups and analysts have previously cast doubt over the automated process. Many fear chaos due to potential machine breakdowns and delays in results transmission, which could lead to a failed election and political limbo.
Such scenarios have made local financial markets nervous.
But the prospect of returning to manual elections, which have regularly been marred by allegations of fraud and can take weeks to decide, may also dismay investors.
"Going back to manual elections means that the next elections quite possibly would have questionable results again, and that is very upsetting," said Peter Wallace of the Wallace Business Forum consultancy.
"We've got a couple of examples in the world today, Iran and Honduras, where a message is being sent that having clean elections, smooth elections, with the government stepping down and the next one stepping in, is a pretty important thing to do."
"And if you don't, then the risks that there would be political unrest would become quite high."
An economist at a foreign bank, who asked not to be quoted, said: "Markets would be a little bit concerned about this development because it would take time to count the votes again and given that so much is at stake, it is a bit of a worry."
"It is not something reflected yet in terms of prices, but if these things develop into something bigger, it is something to be worried about."
President Gloria Macapagal Arroyo has faced three ultimately unsuccessful impeachment attempts over charges she cheated in the previous presidential elections in 2004.
She is not eligible to run next year because of constitutional term limits for elected officials, but critics say she is trying to find some means of clinging on to office.
Police said about 3,000 students and members of civil society groups marched in Manila on Tuesday to the sound of loud drums and whistles to kick off a series of protest actions to remind Arroyo her term will end exactly a year from now.
"We chose this day to hold the rally because we want Gloria to be out by June 30, 2010," said activist-nun Mary John Mananzan.
Some have suggested the looming failure of the poll automation plan could be used by Arroyo's allies to push for postponing the elections, but palace officials have denied there are any such plans.
About 50 million Filipinos are choosing a president, vice president, nearly 300 members of the two-chamber legislature and more than 17,000 local government officials in the May 2010 elections.