Budget deficit to rise on more spending (2:49 p.m.)
MANILA — The Philippines will allow its 2009 budget deficit to rise to 1.2 percent of gross domestic product to accommodate increased public spending to stimulate the economy amid a global slowdown, the finance chief said Monday.
Spending on social services and infrastructure will likely increase the deficit to 102 billion pesos ($2.55 billion) from an initial 40 billion pesos ($851 million) projection, Finance Secretary Margarito Teves said.
“The emphasis now is on job creation,” Teves told Manila radio station DZBB.
After expanding between 4 percent and 4.6 percent last year, the Philippine economy is projected to slow down to a range between 3.7 percent to 4.7 percent this year.
Teves said the government should lead the way in increasing spending because the private sector was reluctant.
The government has set aside a 300 billion peso ($6.4 billion) stimulus package this year. It includes some 3,200 infrastructure projects during the first six months, which it hopes will create at least 35,000 jobs.
Unlike comparable regional economies that depend on exports and services for growth, the Philippine economy is driven by consumption and could be more resilient in the face of the slowdown, said the deputy central bank governor, Diwa Guinigundo.
The government has earlier set a 2008 budget deficit target of 75 billion pesos ($1.6 billion), or 1 percent of GDP. (AP)
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