No less than the country's economic managers are feeling the brunt of a flat growth or decreased remittance flow this year. They are likely to revise the foreign exchange assumption in the government's budget computations to a P46 to P49 band.

Previously, the inter-agency Development Budget Coordination Committee assumed that the peso would range from P45 to P48 per $1 this year.

The Bangko Sentral ng Pilipinas (BSP) reportedly sounded off the committee's technical working group, although the revised peso-dollar assumption is yet to be approved by the Monetary Board, the BSP's policy making body.

BSP data showed that the peso has shed 1.3 percent to P48.289 to $1 yesterday from P47.647 to $1 last January 5.

Last month, BSP governor Amando Tetangco announced that Filipinos working abroad, reeling from massive lay-offs in their economic crisis-hit host countries, are likely to send home money that would aggregate to an amount that is way below the previous double-digit growths in the previous years.

Remittances from Filipinos working abroad reached $16.43 billion last year or $1.98 billion higher that the $14.45 billion registered in 2007 as the number of Filipinos deployed abroad rose considerably by 27.8 percent to 1.376 million from 1.077 million.

Exports, another source of foreign exchange, is also expected to shrink this year due to lower global demand for electronic products.
 
Finance Undersecretary Gil Beltran said the continued weakening of the peso would result to higher collections for the Bureau of Customs but would also lead to higher interest payments for the country’s foreign-denominated debt.
 
Beltran explained that sensitivity analysis conducted by the Finance Department revealed that customs would generate P5.5 billion in additional collections for every P1 unit of depreciation of the peso against the greenback.
 
On the other hand, the country’s foreign debt would likewise increase by P2.5 billion for every unit of depreciation of the local currency against the US dollar.
 
The government is likely to tap the debt market again as a wider budget deficit is expected amidst higher social service and infrastructure spending and dismal tax collections.

Finance secretary Margarito Teves earlier announced a P177.2 billion deficit. Economic planning secretary Ralph Recto, however, said today that the deficit could reach as high as P257 billion.