MANILA, Philippines—(UPDATE) President Gloria Macapagal-Arroyo has tapped National Security Adviser Norberto Gonzales to replace outgoing Defense Secretary Gilbert Teodoro Jr., Malacañang said Saturday.

Teodoro, who is stepping down as defense chief to attend to his presidential campaign, will hand over his post to Gonzales on Monday in Camp Aguinaldo, Executive Secretary Eduardo Ermita said.

"He has served as acting defense secretary. He's capable of doing that job. He knows national security and he knows defense matters,'' Ermita said in a phone interview.

Gonzales will serve in an acting capacity until Arroyo steps down in June 2010. Malacañang is still studying whether he will retain his current post in a concurrent capacity or yield it to somebody else, Ermita said.

Gonzales was designated interim defense secretary in July 2007 pending the assumption of the post by Teodoro the following month.

The announcement of his designation came a day after the ruling Lakas Kampi CMD named actor-TV host Edu Manzano as Teodoro's running mate for the May 2010 presidential elections.

Gonzales will be overseeing the defense department at a crucial time when the country gears up for next year's vote that will pick the successor of Ms Arroyo after a nine-year stint.

The elections will make or break the administration which is facing threats of lawsuits against Arroyo after she steps down in June 2010 for her alleged role in irregularities, according to analysts.

"Considering that he has been publicly advocating for the establishment of a revolutionary transitional government, I wonder what his marching orders are from GMA [Arroyo’s initials],'' former Secretary Teresita Deles said by text message.

Gonzales pushed for a transitional government composed of the Executive, Congress and Judiciary, civil society, Church and the Armed Forces, and headed by Arroyo to effect real reforms. Malacañang distanced itself from this.

Gonzales could not be reached for comment on Saturday.

Gonzales is expected to carry out ongoing programs like the AFP Modernization Programs, and Arroyo's order to crush the insurgency by the end of her term, according to Ermita.

"There are no marching orders yet. All he has to do is carry on with the programs of the DND which he is not a stranger to, such as the AFP modernization program. He's from NICA [National Intelligence Coordinating Agency]. He knows we have to finish the insurgency in a much shorter time,'' Ermita said.

While he has yet to warm his seat, Gonzales' appointment has come under a storm of criticism from militant groups that accused him of mounting a campaign against activists.

"This is a step back for human rights considering Gonzales is an unrepentant promoter of Oplan Bantay Laya and has gone on a crusade against legal and unarmed activist groups during his stint as national security adviser,'' Bayan secretary general Renato Reyes said.

The militant groups Pamalakaya, Kilusang Magbubukid ng Pilipinas, Amihan peasant women federation and Unyon ng mga Manggagawa sa Agrikultura whose representatives are now in Rome to attend the Peoples Forum on Food Sovereignty initiated a signature campaign opposing Gonzales' appointment.

"The appointment of Gonzales to the defense post reflects the long-running criminal policy and program of the Macapagal-Arroyo government. How can you entrust the security and human rights of 92 million Filipinos to an incorrigible person like Norberto Gonzales who champions the doctrine of national security terror and state brutality?" Pamalakaya information officer Gerry Albert Corpuz said in a statement.

Teodoro's resignation is seen as the start of the mass departure of Cabinet secretaries who are expected to file their certificates of candidacy on or before December 1 to run for national and local positions next year.

Some of the Cabinet men, including Secretaries Ace Durano of tourism, Francisco Duque of health and Margarito Teves of finance, are being eyed as administration senatorial candidates.

Socio-Economic Planning Secretary Ralph Recto, Avelino Razon, presidential adviser on the peace process, Public Works Secretary Hermogenes Ebdane Jr. had quit to prepare for their plans to run for senator, mayor of Manila, and for President, respectively.