FORT DEL PILAR, Baguio -- (UPDATE) President Gloria Macapagal-Arroyo has asked the Philippine Military Academy (PMA) and the rest of the military community to cut spending by 1.5 percent and use the savings for the poor.

In her speech during the PMA graduation, the President said the government could raise P7 billion in savings from conservation measures in the military alone.

The President said the economic crisis has been proving to be a powder keg that could threaten internal security and the Armed Forces of the Philippines would be tapped to soften the blow.

She said the PMA cadets were lucky because jobs would be waiting for them, unlike the civilian graduates, whose job prospects were affected by market forces.

Arroyo also reminded the 184 graduates of the Masiglahi Class of their special role in helping the country "arrive at a just completion of our peace processes."

Arroyo said peace "is always our preferred choice."

"We need your military skills to make sure that [peace] would also be the preferred choice of all parties in the [armed] conflicts," she said.

"Armed conflicts slow down growth and long period of economic inactivity is a powder keg to the loss of security," she said.

But "peace conduces to development and development conduces to peace," Arroyo stressed in her speech.

Quoting her graduation speech of 2001, Ms Arroyo said she always considered the "peace process as a function of defense."

"The men with guns do not speak for the people. That is why we are conducting authentic dialogues with communities. They have a bigger stake in peace and deserve a stronger voice," she said.

She said soldiers have performed special tasks without firing their weapons in the pursuit of peace. These include building classrooms, acting as soldier-teachers and conducting medical missions.

But while asking the soldiers to fight for peace, Arroyo also asked the Department of National Defense and the Armed Forces of the Philippines to work within budget, cut spending by 1.5 percent, and help government raise savings of P7 billion, which it could use to create new jobs for the poor.

Arroyo said the government's chief task has always been to encourage the private sector to create more jobs and to balance the budget.

The PMA has anticipated a reduced budget. Rear Admiral Leonardo Calderon Jr., PMA superintendent, said he has been pursuing his predecessor's program of mounting corporate road shows to draw donor support for the academy.

Cadets have also started to feel the pinch.

Five of the Masiglahi class members are scheduled to wed in the next few months, but they may be compelled to seek government loans to be able to.

Tradition requires the class to donate portions of their monthly P16,000 stipend to classmates who wed immediately after graduation.

But several of them complained that they had emptied their cadet individual savings accounts (Cisa), the Philippine Daily Inquirer (parent company of INQUIRER.net) learned.

Jessica Samantha Dob, girlfriend of newly commissioned 2nd Lieutenant Joseph Acleta, said he and his classmates have been debating whether they could still compel the class to donate funds.

"Some of the cadets help out their families by sending them parts of their stipend, so we understand," said Dob, a senior journalism major at the University of the Philippines Baguio.

PMA officials do not dictate how the Cisa money is to be spent, but government expects the stipend to be used solely for PMA training, according to Captain Agnes Lynette Flores, PMA spokesperson.

She said the PMA must start reviewing this year's budget allocations in light of Arroyo's latest directive to cut government expenses.