’09 budget gap below ‘prudent limit’
INQUIRER.net
First Posted 02:25:00 12/19/2008
Filed Under: State Budget & Taxes, Economy and Business and Finance
Based on a report of the Philippine Daily Inquirer
A P102-billion projected budget deficit for 2009 would be below the threshold set by foreign creditors in gauging fiscal discipline and would still help the Philippine economy win favor from local and foreign capital markets, Economic Planning Secretary Ralph Recto said.
Recto said creditors and the entire international financial community considered a budget deficit equivalent to 2.0 percent of gross domestic product (GDP) to be within prudent limits because governments next year would need to spend more on infrastructure and social services and take other economic pump-priming measures to help counter the effects of a global recession.
The target limit for the 2009 budget deficit of P102 billion, adjusted from P40 billion, is equivalent to 1.2 percent of the projected GDP for next year.
“At P102 billion, the market can give us a carrot,” Recto said.
“Keeping the deficit manageable would help the peso appreciate and keep interest rates benign,” he added.
For this year, the target ceiling for the budget deficit is P75 billion. Development Bank of Singapore said in a report that it expected the budget deficit this year to settle at P54 billion. Reported by Michelle V. Remo
|
