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By Chino S. Leyco, Reporter
PHILIPPINE asset sales will take a hit from
renewed risk aversion arising from the US’ economic woes at a time
when the government requires additional resources to prime the pump
and keep the domestic economy afloat, according to pundits.
In a research note, Development Bank of
Singapore (DBS) said an unfriendly investment climate will make it
difficult for the Philippines to plug the fiscal shortfall of the
Bureaus of Internal Revenue (BIR) and of Customs with asset sale
proceeds if risk aversion hurts the local stock market.
“The budget will be pressured from lower
revenue collection from a slower economy, and increased government
spending to support growth,” DBS said.
The Singapore bank expects renewed risk aversion
leading to emerging market jitters starting this month until June.
Finance Secretary Margarito B. Teves had said
the government is set to privatize P29.6 billion worth of assets
this year, including the Food Terminal Inc., the Fujimi property in
Tokyo, and the old penitentiary lot in Muntinlupa.
Last January, the government sold its shares in
Manila Electric Co. to state-run Government Service Insurance System
for P8.9 billion.
The government plans to sell more assets as
President Arroyo aims to balance her administration’s budget this
year. The BIR and Customs however have warned that they would be
hard-pressed meeting collection targets this year.
In a separate research note, UBS Investment
Research said the government run the risk of incurring a deficit
this year due to their planned infrastructure spending hike.
Despite the rise in construction investment
relative to the country’s gross domestic product (GDP), this ratio
remains low historically, UBS said.
“National government infrastructure spending
rose 0.3 percentage point of GDP in 2007 while private
infrastructure-related spending probably added more,” the report
said.
The government’s ratio of spending to GDP
however is still way below the target 4 percent ratio by 2010.
The investment bank said private sector and
foreign funding availability would be difficult in the short-term,
thus the need for government to increase its spending for
infrastructure.
In a separate report, JP Morgan said the
majority of the government’s infrastructure spending went to roads
and bridges at 23 percent; urban rail transport, 21 percent; power,
21 percent; and water resources, 15 percent.
This year, the budget department said the
government has programmed P113 billion for infrastructure spending,
60 percent of which will be made available in the first semester to
counteract the effects of a possible US recession.
The Philippine budget for infrastructure
projects this year is higher by 22 percent from P92.6 billion in
2007.
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