Tensions within the Philippine military over a foiled coup receded on Monday but problems loomed on a new front for President Gloria Macapagal Arroyo as lawyers prepared to challenge her emergency rule in court.

Schools were closed for the day in Manila, but it was otherwise business as usual in the capital and the financial markets were calmer after being spooked on Friday by the crisis.

The peso moved 0.2 percent lower to 52.3 to the dollar in early trade on Monday and the main stock index was down 0.4 percent. Both had tumbled 1 percent on Friday.

"I am hoping that things would settle down but if it doesn't I guess we just have to work a little harder and get things clarified to the public and to the investors," Philippines Finance Secretary Margarito Teves told Reuters.

Dozens of Marines briefly defied the state of emergency on Sunday, calling for public support after the elite force's commander was removed for links with the plan to topple Arroyo.

But they returned to their barracks peacefully after staging a show of support for their sacked chief -- in full battle gear and with armored personnel carriers -- at their base in Manila.

Arroyo, who survived an impeachment attempt last year over allegations of election cheating and corruption, invoked the emergency on Friday to confront what she said was a conspiracy by political enemies, communists and "military adventurists".

Critics say her move, which allows for arrests without warrant and an extension of detention without charge, smacks of the martial law days of dictator Ferdinand Marcos, who was toppled in a "people power" uprising 20 years ago.

A lawyers' group said it would file a petition with the Supreme Court on Monday for a temporary restraining order on the national emergency, arguing that it was unconstitutional.

"We hope that the Supreme Court will act immediately on the matter to avert any escalation of the political crisis that we have now resulting from the proclamation," said Marlon Manuel, spokesman of the Alternative Law Group.

More arrests expected 

The Philippines, Washington's closest security partner in Southeast Asia, is closely watched by investors as Asia's most active issuer of sovereign debt after Japan.

Despite pushing reforms to improve revenues, cut debt and curb rampant corruption, Arroyo has been unable to escape the turmoil of a fractious military and political system.

The Philippine armed forces, riddled with graft and low on morale in their battle against communist and Muslim insurgencies, spawned at least a dozen coup attempts since the overthrow of Marcos in a "people power" uprising in 1986.

Senior military officers said Major-General Renato Miranda had been allowed a "graceful exit" as chief of the 8,000 Marines in the 117,000-member armed forces after he became the most senior officer so far to be linked to the foiled coup.

Dozens of civilians, mainly from leftist groups, gathered at the base after an appeal for public support by a respected Marine colonel loyal to Miranda. But the standoff was later resolved after a straw poll of senior commanders, and the crowd dispersed.

Miranda's dismissal followed the detention of the head of the elite Scout Rangers regiment for allegedly planning to lead troops to incite crowds at anti-Arroyo rallies.

A former police chief and leftist congressman were also detained for questioning over the weekend and government officials said more arrests were expected in coming days.

Arroyo has come in for sharp criticism for a crackdown on the media, particularly over a raid at the Daily Tribune newspaper.

The Philippine Daily Inquirer said that Vice President Noli de Castro, a former broadcast journalist, had voiced his concern.

"As vice president and as part of media, I reiterate my stand that the government respect human rights and protect civil liberties, especially freedom of the press," the paper quoted de Castro as saying.

(Chinadaily.com via agencies February 27, 2006)