Philippine President Benigno Aquino has locked horns with what he calls an obstructionist judiciary beholden to his predecessor, but his anti-corruption zeal risks plunging the country into instability.

Supreme Court Chief Justice Renato Corona, accused of protecting former president Gloria Macapagal Arroyo from investigation, was impeached by the lower house of Congress, dominated by Aquino allies, on Monday.

Corona has vowed to fight the first impeachment of a chief justice, strongly backed by Aquino, a confrontation pointing to policy paralysis ahead.

If Corona is successfully impeached, Aquino will stand accused of cowering the judiciary into submission. If Corona is acquitted, Aquino's public support will take a hit.

"Aquino is navigating dangerous waters," said Earl Parreno, an analyst at the Institute for Political and Electoral Reforms.

"There is danger his political stock will be greatly eroded if Corona escapes in the impeachment trial. That could increase the judiciary's hostility."

Uncertainties ahead of the impeachment process could turn off investors, dampening economic growth which the International Monetary Fund expects anyway to slow from this year's weak showing due to sluggish exports.

Benjamin Diokno, former budget secretary and economics professor at the University of the Philippines, said the impeachment could distract leaders from deep-seated problems of unemployment, slow growth and inflation.

'CREEPING DICTATORSHIP'
Arroyo, president from 2001-2010 and now a member of Congress, is being held at an army hospital after her arrest last month on charges of rigging the Senate polls in 2007.

There was speculation that Corona would resign before his trial, as the head of the anti-graft agency, another Arroyo ally, did earlier this year when she faced charges of blocking corruption cases against the former leader and her allies.

But Corona, once Arroyo's chief of staff, has made his position clear, meaning he will hear appeals against the legality of Arroyo's arrest.

He has accused Aquino of building a 'creeping dictatorship,' a stinging accusation against the president whose father was assassinated in 1983 during the late dictator Ferdinand Marcos's rule.

But there was no sign that the military, not unfamiliar with removing presidents, would get involved. Aquino's popularity and perceived integrity have significantly lowered the risk of an overthrow.

And on Monday, Aquino installed an army general and long-time family friend as head of the 130,000-member armed forces, an insurance soldiers will fall in line.

Aquino's mother, Corazon, faced more than half a dozen coup attempts between 1986, when Marcos was toppled, and 1992 as democracy was restored, scaring potential investors and slowing growth.

Joaquin Bernas, a Jesuit priest and one of the framers of the 1987 constitution, likened Aquino to Cuba's Fidel Castro for wanting to control the judiciary and legislature.

Senator Miriam Defensor Santiago, recently elected to the International Criminal Court, said the move would have a chilling effect on other Supreme Court justices.

"They will now be frightened out of their wits to write what they truly feel should be the proper decision according to the law and the facts established," said Santiago, who will sit in the impeachment trial as a judge.