Elections to boost economy by 0.5%

MANILA, Philippines - The government is counting on next year’s 2010 elections to help pump-prime the economy and help it recover from this year’s slowdown.

The national elections in 2010 are expected to boost economic growth by 0.5 percent as consumers are expected to spend more, Finance Undersecretary Gil Beltran said yesterday.

Beltran said that next year’s elections are expected to boost certain industries such as the printing and publishing, media and the advertising industries. This, in turn, would help fuel consumer spending in 2010, the Finance official added.

However, this growth is not expected to translate to higher tax collections because some industries that are usually related to elections do not fully declare taxable income.

Other sources of funds for consumer spending could also come from cash shelled out by politicians seeking to buy votes or cheat in the elections.

The Development Budget Coordination Committee (DBCC) expects the economy, as measured by gross domestic product (GDP) to grow anywhere from 4.3 percent to 4.7 percent in 2010 from this year’s revised economic growth projection of 3.1 percent to 4.1 percent.

The DBCC also expects the country’s inflation or the rate of increase in consumer prices to slow down to an average of 2.5 percent, slower than the projected average inflation rate of 3.5 percent.

Exports, meanwhile, are expected to recover in 2010 and grow by 4.9 percent from an expected drop of eight to 10 percent this year.

The peso is expected to hit P46 against the dollar next year.

The government’s budget deficit in 2010, meanwhile, is expected to hit two percent of GDP or P173.7 billion, Beltran also said.

For this year, the government expects the economy to grow from 3.1 percent to 4.1 percent and the budget deficit to hit P199.2 billion.

Fiscal authorities earlier announced that the government had already abandoned its 2010 balanced budget goal given the global economic crisis.

This early, politicians aiming for the presidency are already spending millions on television, newspaper and radio advertisements. 

Politicians that have running television advertisements include Senator Manuel Roxas II, Senator Manuel Villar, Defense Secretary Gilbert Teodoro and Makati Mayor Jejomar Binay.