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By Chino S. Leyco, Reporter
DESPITE concerns over the Philippines’ poor
revenue performance, Standard & Poor’s Ratings Services said
the country can withstand a possible US recession.
Agost Benard, Standard & Poor’s associate
director, said the Philippine economy, as measured by the
country’s gross domestic product (GDP), would grow 6 percent to 7
percent this year.
“We see GDP pretty much close to government
target. We’re not too worried about the effects of US
recession,” Benard told reporters.
He also said overseas Filipino remittances will
not decline significantly this year on the back of the US’
economic woes.
Even with its sound economic fundamentals, the
Philippines still has to remedy its poor tax collection performance,
Benard said, citing the shortfalls incurred by the Bureaus of
Internal Revenue and of Customs last year.
Last year, the two bureaus failed to hit the
P994.04-billion target after actual collections were short by P71.95
billion.
The rating firm executive said the company
expects the Philippines to end the year with a balanced budget.
To date, Standard & Poor’s rates the
Philippines a ‘BB’ minus, or three notches below investment
grade. It also holds a stable outlook on the country, which means
that the Philippines is likely to maintain its current junk status
in the next six months to a year.
Representatives of the US-based firm met this
week with officials from the Department of Finance, Bangko Sentral
ng Pilipinas and National Economic Development Authority preparatory
to coming up with a new outlook and rating recommendation on the
country.
Finance Sercretary Margarito B. Teves said the
government hopes that Moody’s Investors Service’s positive
outlook on the country will be followed by positive ratings actions
by Standard & Poor’s and Fitch Ratings.
Due to a huge windfall from its asset sales, the
government turned in a P9.4-billion budget deficit last year. This
is way below the programmed ceiling of P63 billion. This was the
country’s smallest funding gap since 1998 and represented 0.1
percent of GDP.
Privatization proceeds last year reached over
P90 billion, helping offset the collection shortfall of the BIR and
Customs, both of which account for more than 70 percent of
government revenues. For this year, the government expects its
privatization windfall to slip to P30 billion, thus the two bureaus
would have to pick up the slack for the government to attain its
balanced-budget aspirations.
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