MANILA, THE PHILIPPINES--Dec. 22, 1986.

Malacanang Palace--Minister Guingona is holding a press conference following this morning's cabinet meeting on the government's response to rebel demands. Guingona, the chief negotiator with the Communists, is a vital link holding together the tenuous cease-fire, yet security is lax. The nearest security guard is out on the front steps, sitting quietly on a stool with an M-16 rifle across his knees. He does not check visitors for identification.

Downtown Manila--The Communists, reported by the American press as having come in from the countryside, are nowhere to be found. If they are here, they are keeping to themselves.

Upstairs in the Kangaroo Club, one of many hangouts for the Australian expatriate population, the regulars are skeptical about the press reports. From their privileged vantage point in the air-conditioned bar, everything appears to be business as usual.

"We had a few tanks roll past a couple of months ago," says one, referring to the popular uprising against Marcos, "but that was only once." Outside the American embassy, however, enormous concrete flower pots have appeared overnight, apparently as protection against truck bombers. Something, the Aussies admit, could be afoot.

In the Blue Hawaii, one in an endless strip of girlie bars, business is good, even though it's early afternoon. Every few minutes the girls dancing on the bar take over for the girls hustling drinks. Six pesos--roughly 30 American cents--buys the audience of businessmen, sailors and tourists large mugs of beer; drinks for the girls cost 40 pesos. For 200 they will let you take them upstairs.

In the Philippines it is good money, a glittering tribute to capitalism in action. "I hate Communism," says one of the girls, when the subject is brought up. Politics is not a favorite topic of conversation.

Malacanang Palace--After Guingino's press conference a Christmas party is held for the children of the press corps as the reporters and cameramen slowly disperse. Jose Gonzalez, a former movie star who now heads the government radio station, lingers to chat about politics. He is controversial and knows it.

Under Marcos, Gonzalez claims, he was offered a million pesos to toe the line, but refused. Nowadays he comes to work armed, sometimes with an Uzi submachine gun.

Philippine Plaza--The open spaces of the Plaza are dominated by monolithic buildings built by Imelda Marcos as museums and cultural centers; now, they sit largely unused. It is as though the Marcos' were puppeteers controlling the whole economy, which, without their guiding hand, has collapsed.

Nearby, crowds are gathering by the entrance of the Christmas carnival, where shotgun-toting security guards are passing out promotional leaflets. Cigarette vendors mill through the crowd, peddling packs or individual cigarettes. A cabdriver offers his services, but is just as happy to talk. He likes Aquino, he says, but he is not sure about her proposed constitution. He supposes he will vote the way everyone else does.

Malacanang Palace--There is no consensus on anything here. It is not even clear how many ministers there are in Aquino's cabinet. Rumors gush freely. Some of the more interesting, if unsubstantiated: First, Enrile and Ramos did not rebel in favor of Aquino. They tried to seize power themselves, failed and then had to strike a deal with Aquino to save their own skins. Second, Enrile was ousted in the recent cabinet shake-up because of his dealings with Communists, for whom he had arranged arms shipments and whom he occasionally hired to protect his private fiefdom in the Philippine countryside.

In the press room a few Filipino reporters sit banging out copy on the old Underwoods. The phones work only on occasion, depending on the relative humidity and the phase of the moon.

One must shout to be heard: "I'm sorry, I can't hear you. Is the minister still in the meeting?"

"Yes," faintly.

"When will he be out?"

"I'm sorry sir, he has left the meeting." And so forth. It is not clear if anyone knows what is going on. Bureaucratic channels have become so confused that the Philippine Embassy in New York has to keep in touch via the Minister of Agrarian Reform.

DECEMBER 30--Corazon Aquino is named Time magazine's "Woman of the Year," one of the planet's highest accolades. She has, Time says, singlehandedly restored the world's faith in the power of democracy to prevail over oppression.

At this time Aquino holds, in theory, complete legislative and executive power over the nation. The majority of mayorships have not been legally elected, but appointed by Aquino herself. Communist rebels hold a significant portion of the countryside, and contingents of the far right have united with members of the left to oppose Aquino's draft constitution. Most of the corruption of the Marcos era remains. The economy is worse than ever.

Aquino remains enormously popular, especially at the international level. She is not so much a politician as a star, a heroine who has won over the public with her honest simplicity. While turmoil swirls around her, Aquino is untouched.

Naivete, however, cannot carry the day forever. In the Philippines, politics are either dirty, improvised or utterly confused. Whether Aquino will succeed even Time cannot tell.