ASEAN KEY DESTINATIONS
Philippines: Budget deficit to exceed $2bn in 2009
The Philippines budget deficit will rise to 102 billion pesos ($2.07 billion) in 2009 as the government steps up spending to stimulate the economy, AFP quoted the finance secretary as saying Wednesday.
Secretary Margarito Teves told diplomats that this would amount to 1.2 percent of gross domestic product (GDP).
He expressed confidence the government would still keep its budget deficit this year within its previous ceiling of 75 billion pesos. But he conceded that it would be "increasingly difficult" to attain a balanced budget by 2010, as originally planned.
Teves said the government would also boost its revenue collections in 2009 in order to spend more on social services and infrastructure and sustain growth despite the worldwide financial turmoil .
Among the measures to boost revenues the department would take is to "step up the fear factor," by boosting the efforts to catch and convict tax evaders and smugglers, he said.
But Teves is also hoping to pass new measures to increase revenues such as revamping fiscal incentives and so-called "sin taxes" on tobacco and alcohol products and simplifying the tax system for professionals.
Teves also remained optimistic that the Philippines would post 3.7 to 4.7 percent GDP growth in 2009 even if other countries go into recession.
He cited foreign institutions who have said the country is well-positioned to weather the international crisis due to the passage of crucial new revenue measures in recent years.
The budget deficit in the first 10 months of the year amounted to 62.3 billion pesos, a 50.2 percent increase from the same period last year, Teves said.
Although revenues rose 8.5 percent in the first 10 months of the year, they were still outpaced by expenditure, which rose 10.4 percent to 1.034 trillion pesos, he said.
The IMF team also said it expects GDP growth to drop to about 3.5 percent next year from an estimated 4.4 percent this year.