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By Maricel E. Burgonio Reporter
LAST month’s wider budget deficit is not yet a threat to
Philippine economic growth, according to analysts.
“The cumulative budget deficit of P53.4
billion compared with P40 billion a year ago is not a threat to
economic stability as it is less than one percent of gross domestic
product (GDP),” ATR Kim Eng Securities Inc. said.
The Development and Budget Coordinating
Committee (DBCC) projected GDP growth to reach 4.4 percent to 4.9
percent this year from a 31-year high of 7.3 percent last year.
In a report, ATR Kim Eng said it expects the
country’s fiscal gap to hit P45 billion or 0.6 percent of GDP this
year, lower than the government’s program of P75 billion.
“We believe asset sales late in the year will
narrow the gap,” it said.
Separately, JP Morgan said the government is
likely to meet its P75 billion budget deficit target this year, if
the 40 percent government stake in Petron Corp. would be
successfully sold.
“Overall, the manageable slippage in deficit
for the sake of growth should not detract from the longer term
fiscal progress in the country,” the US-based investment bank
said, adding the recent acceleration in non-interest expenditure
would mitigate the impact of the global economic slowdown.
Philippine Equity Partners Inc. (PEP) however
has a different take on the matter, saying the deficit would hit P82
billion, exceeding the government ceiling. In a report, the local
fund manager said the fiscal gap would widen to P140 billion next
year.
“The [Department of Finance] reiterated their
deficit target of P75 billion for this year, which suddenly looks
dangerously near as it implies a gap of P22 billion for the fourth
quarter. Considering that the government may have to step up
spending and try to keep revenue buoyant in a slowing economy, there
is much work to do in the fourth quarter and 2009,” PEP said.
On Monday, the finance department announced that
last month’s deficit widened after the Bureau of Internal Revenue
(BIR) failed to hit collection targets.
The BIR, which is the biggest source of
government revenues, collected P587.9 billion at end-September,
lower than the P606.8 billion target.
As a result, the government’s funding gap grew
33 percent to P53.4 billion from P40 billion in the same nine-month
period last year. The end-September financing shortfall is also
higher than the P35.1 billion expected for the period.
In September alone, the budget deficit surged 49
percent to P21.6 billion from P14.5 billion in the same period last
year, as revenues reached P90 billion while expenditures jumped to
P111 billion.
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