Raul Gonzales, the justice secretary, said the government had to take action against Fortunato Abat, 80, and three colleagues in case their activities grew into “something more serious”.
President Arroyo has been mired in a political crisis since June because of allegations of election fraud and corruption, but she denies any wrongdoing and shows no signs of stepping down.
Abat, a former defence secretary and ambassador to China, was arrested on Thursday after he and a small group of supporters declared an “alternative” administration on Wednesday.
Emmanuel Velasco, a state prosecutor, said: “They did not commit any violence but they still violated the law by establishing a government of their own.”
Abat and his three colleagues, including a former ambassador to the United Arab Emirates and a former finance secretary, were released after posting bail of 12,000 pesos ($224) each.
If convicted, they could be jailed for up to six years.
Until Friday, Arroyo’s government had been playing down rumours of a plot to unseat her, despite an intelligence report naming a dozen retired and serving officers as its leaders.
Two presidents of the Philippines, Ferdinand Marcos and Joseph Estrada, were ousted in “people power” uprisings backed by the army and there have been a dozen coup attempts since 1986.
The army is growing restive
Arroyo, who rose from vice-president in 2001 when Estrada was overthrown, put down a one-day mutiny by about 300 soldiers in July 2003 and weathered an attempt to impeach her in Congress in September over the vote-rigging and corruption allegations.
Ramon Casiple, a political analyst, said Abat had achieved his objective of arousing the sentiments of soldiers and police officers.
“This is not an ordinary Christmas,” Casiple said. “I don’t think the government has a wider option in dealing with General Abat. It has to take him seriously because there’s widespread unrest in the army and police.”
Abat said Arroyo had lost her moral authority to govern but denied that he had planned to oust her. “Our movement is leading a peaceful event, not a coup or a military takeover,” he said on television on Thursday.