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| Philippines says budget deficit may narrow next year as growth accelerates |
| 03-SEP-2010 | Bloomberg |
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| 3 Sep, 2010 - 7:00:00 AM |
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The Philippines may narrow its budget deficit next year to the smallest since 2008 as economic growth accelerates, Finance Secretary Cesar Purisima said.
The 2011 shortfall may shrink to as little as 226 billion pesos ($5 billion), or 2.5 percent of gross domestic product if the economy expands 7 percent, Purisima told reporters in Manila today. Growth this year may reach or exceed the top-end of the government's 5 percent-to-6 percent goal, Economic Planning Secretary Cayetano Paderanga said.
The Southeast Asian nation is targeting annual growth of as much as 8 percent starting next year, betting that investments in railways, roads and ports will create jobs and boost trade. The peso may appreciate in the "near term" as the economy expands and remittances sent home by Filipinos overseas buoy spending, central bank Governor Amando Tetangco said today.
"The market is looking beyond this year's deficit and to a longer-term scenario that the government can deliver on its promise to bring its fiscal house in order," said Malou Liwag, senior vice president for treasury marketing at Philippine National Bank in Manila. "The targets are credible and achievable," she said.
The Philippine peso rose 0.5 percent to 45.135 per dollar as of 1:49 p.m. in Manila, climbing by the most in a week. The yield on the 7 percent peso bond due January 2016 fell 2 basis points to 5.46 percent, the lowest level since the notes were first sold last year.
Gross domestic product increased 7.9 percent from a year earlier last quarter, compared with a revised 7.8 percent gain in the three months through March.
The Bureau of Internal Revenue, which accounts for two- thirds of state earnings, may have difficulty meeting its August collection goal and revenue may start recovering in September, Commissioner Kim Henares said. The Bureau of Customs' August revenue target of 23.5 billion pesos is "a challenge," Commissioner Angelito Alvarez said.
http://www.bloomberg.com/news/2010-09-01/philippines-says-budget-deficit-may-narrow-next-year-as-growth-accelerates.html
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