The year 2002 saw the government of Gloria Macapagal-Arroyo facing an almost unending list of problems and controversies. She had been installed President in January 2001 after the tumultuous “People Power 2/Edsa II”, a popular uprising that overthrew the administration of former President Joseph Estrada. From a controversial and rocky start and weak political support, Arroyo seemed to have finally found her bearings after a year and half in office. She even managed to score a relatively high popular support rating in the middle of July 2002. However, her popularity began to ebb in the later part of 2002, culminating in her unexpected year-end announcement that she would not contest the 2004 presidential elections.

The revised Philippine Constitution of 1987 had effectively set the limit of a Philippine President's term to a single six-year one. Arroyo's case was different however. She took over from Joseph Estrada after he was implicated in a series of corruption scandals that resulted in a controversial impeachment trial. The trial and the series of turbulent events that followed climaxed in the “People Power 2” uprising on 20 January 2001, ending the two years of Estrada's presidency. Hence, Arroyo's current four-year term was only to complete what would have been Estrada's six-year term as President, making her technically eligible to run again as President for a full six-year term. As the incumbent President, Arroyo's chances of getting re-elected — until the middle of 2002 — were actually quite strong. They were buoyed by her achievement of a modicum of political stability and her relatively successful management of the country's economic challenges.

Thus, President Arroyo's announcement took the country by surprise. Apparently even her closest allies were left in the dark until she delivered her year-end speech on 30 December 2002, which coincided with the country's celebration of National Heroes Day. The significance of the timing of the announcement was not lost on observers and political commentators.