Philippines sees room to adjust 2010 economic goals

Posted at 06/04/10 4:11 PM

Finance chief says gov't may raise GDP growth, trim deficit goal

MANILA, Philippines - The country may end the year with a faster growth than earlier expected, helping the government lift its revenues and narrow its budget deficit for 2010, Finance Secretary Margarito Teves said on Friday.

The government has scope to revise some of its macroeconomic growth goals this year and raise its growth target from the current 2.6% to 3.6% following the country's stellar first-quarter performance, Teves said.

"It looks like there is room for adjustments in some of the macroeconomic targets upwards because we have favourable results during the first quarter," Teves told reporters.

He also said the government may consider lowering its 2010 budget deficit goal from the current P293.2 billion ($6.3 billion) or 3.6% of GDP, if expenditures stay within the program for the rest of the year and state revenues come in within target.

"Other things being equal, without examining first the micro components, that seems to be the direction, but I cannot give you a clear answer yet until we have discussed this together with the DBCC," Teves said when asked about the 2010 budget deficit goal.

DBCC or the Development Budget Coordination Committee is the inter-agency body tasked to set the government's economic and fiscal policies and goals. The technical working group of the DBCC will meet next week to assess the current targets.

The Philippine economy grew 7.3% in the March quarter, its fastest in 22 years.

But some analysts think the strong pace of growth was unlikely to be sustained in the second half as a boost from spending related to the May 10 presidential election fades and European austerity measures cut demand for the country's exports. Germany and the Netherlands are among the Philippines' top 10 export markets.