The Philippines will try to keep the deficit at P102 billion next year, its revised budget deficit ceiling for 2009, Finance Secretary Margarito Teves said.
The P102 billion programmed budget deficit next year which is equivalent to 1.2 percent of gross domestic product (GDP), is wider than the original deficit ceiling for 2009 of P40 billion.
While rating agencies and multilateral lenders are encouraging countries to spend amount equivalent to two percent of GDP to help them cope with the global financial turmoil, Teves said it would be better for the Philippines to keep the deficit at P102 billion or 1.2 percent of GDP.
“The two percent cannot be used as a universal formula. Each country has its unique peculiarities. Like I said the Philippines has a large stock of debt, we cannot probably afford a two percent, we have to be more prudent than having a two percent. I’d like to start with 1.2 percent and let’s see how it will develop,” Teves told reporters.
The Philippines is finding it difficult to achieve a balanced budget by 2010, with the budget deficit expected to swell to P102 billion next year or P62 billion more than the original program of P40 billion due to the difficult global economic tide.
The P102 billion programmed deficit for 2009 took into account higher expenditures of P1.467.8 trillion as the government plans to boost spending next year to help pump-prime the economy. This is above the original program of P1.433 trillion.
On the other hand, the government expects total revenues in 2009 to decline to P1.365 trillion from the original program of P1.393 trillion.
The latest budget deficit projection of P102 billion is above the revised deficit forecasts for 2009 of P75 to P80 billion.
For this year, the government is still hoping to contain the budget deficit within the program of P75 billion or one percent of GDP.
The government’s budget deficit swelled to P9 billion in October, a six-fold increase from the P1.5 billion posted a year ago, latest data from the Department of Finance (DOJ) showed.
The October deficit brought the January to October budget gap to P62.3 billion, higher than the P41.5 billion deficit incurred during the same period last year.