MANILA, Philippines -- President Gloria Macapagal-Arroyo is considering a P75-billion spending package to help shield the Philippines against an economic slowdown in the US, officials said Wednesday.

Arroyo will meet her Cabinet this Thursday to discuss the proposal and draw up possible funding sources, Budget Secretary Rolando Andaya told reporters.

"This is a one-shot package designed as a proportional response to the [looming] US recession," said Joey Salceda, governor of Albay province and an economic adviser to Arroyo.

The figure of P75 billion is equivalent to one percent of the country's nominal gross domestic product, Salceda added.

However, Andaya admitted that Arroyo's economic officials were not fully sold on the proposal, fearing that the budget deficits could balloon higher than targets, just as what happened during country’s previous stimulus plans.

Andaya said the government approved a P40-billion package in 1999 amid the Asian crisis and a P60-billion spending program in 2001. Salceda insisted the proposed package would not affect the national government’s target of having a balanced budget this year.

Andaya said that if the President approved the proposal Congress would be asked to pass a supplemental budget by March, with P16 billion each for infrastructure projects and income tax relief for the middle class, and P15 billion to build farm support facilities.

Salceda proposed using government royalties from an offshore natural gas field and the sale of government corporate assets to finance the subsidies.

He said the government would have to explain the package to the international credit rating agencies to assure them that the government was not tinkering with the tax structure.

Moody's Investors Service last week raised its outlook on Philippine ratings to “positive” from “stable,” citing the government's easing dependence on external financing.

It warned that the government "will continue to face considerable challenges in sustaining progress in strengthening its fiscal position." Edited by INQUIRER.net