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Saturday, August 12, 2006
RP economy on the upswing: Arroyo
PRESIDENT Gloria Macapagal-Arroyo said the economy is doing very well and that the budget deficit this year may even be as low as P100 billion while exports growth can go up as high as 15 percent.
Arroyo held a roundtable discussion on improved tax collection, lowering of the inflation target to 3.5 to four percent, and the marked drop in poverty incidence in the different provinces.
Arroyo said Budget Secretary Rolando Andaya Jr. projected a P100 billion deficit by the end of the year below the target of P125 billion.
However, she said she told Andaya that government is sticking to the P125 billion target "because I think that rather than holding on to that extra P25 billion, we should spend that bit on infrastructure and social services." She said the P125 billion target is in line with the goal of a balanced budget in 2008.
"Isn't it better to spend the money on infrastructure rather than to keep making the deficit smaller and smaller? We already have our targets anyway. In fact we have already advanced our targets. Originally the balanced budget was (due in) 2010 but my managers insist on 2008 and we're still ahead of the 2008. I don't know (if) we should try to balance our budget this year," she said.
She said government is now learning how to spend big amounts after being cash strapped for so long.
Socioeconomic Planning Secretary Romulo Neri said government has to spend more and faster because "yung savings natin umaapaw sa sistema (our savings are overflowing from the system)". He said this could be attributed to high revenue collections.
Arroyo said the exports sector has grown by 20 percent from January to June this year compared to 17 percent in the same period last year, with garments growing fastest despite the fact that the country is out of the quota regime.
Trade Secretary Peter Favila said this is fifth consecutive month that exports had a double-digit growth.
"So we are more than confident that annual growth target will be in the vicinity of at the very least 15 percent," Arroyo said.
Favila said "15 percent is doable".
Finance Undersecretary Gil Beltran said the revenue collections rose by 21 percent during the first half of the year due to the programs against tax evaders and smugglers.
Arroyo said in jest that despite the high revenue collections, Finance Secretary Margarito Teves is suffering from a bad stomach.
Neri said Teves is suffering because of his pancreas but is expected to be discharged Friday. Reports said Teves has been confined at the Asian Hospital in Muntinlupa City since last Monday.
Neri said the Medium-Term Philippine Investment Plan (MTPIP) is "practically finished" and that the Cabinet is just fine tuning it. He said it would be shown to the President and the Cabinet for approval next week.
Arroyo has said that China, Japan, the World Bank (WB), and the Asian Development Bank (ADB) have committed US$7 billion to the super regions projects.
Neri said China indicated, through the Export-Import Bank (Eximbank), that they are willing to finance US$2 billion a year for the next three years. He said government is negotiating with the Japan Bank of International Cooperation (JBIC) for the 27th Yen Loan amounting to US$1 billion. He said there are US$200 million program loans each from ADB and World Bank. (JMR/Sunnex)
(August 12, 2006 issue)
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