Thursday, August 26, 2004
Philippines submits US$16b 2005 budget proposal
MANILA, Philippines (AP) - The Philippine government submitted to Congress on Thursday a record 907 billion peso (US$16 billion; euro 13 billion) budget for 2005 that's focused on servicing the country's mounting debt and reining its deficit.
In the budget, President Gloria Arroyo Macapagal's administration forecast economic growth of 5.3 percent to 6.3 percent next year, the fastest rate of expansion since the late 1980s. The economy is predicted to grow by 4.9 percent to 5.8 percent this year. The government earmarked a third of the budget to service its growing debt of 3.36 trillion pesos (US$60 billion; euro 48 billion). It also projected a fiscal deficit of 184.5 billion pesos (US$3 billion; euro 2.4 billion) - or 3.6 percent of gross domestic product. The government put 2005 revenue collection at 758.5 billion pesos (US$13.5 billion; euro 11 billion). This fiscal gap is smaller than the deficit target of 197.8 billion pesos (US$35 billion; euro 29 billion) - or 4.2 percent of GDP - set for this year, which some analysts have said the government is likely to miss because of poor tax collection. The proposed budget came days after finance officials scrambled to reassure jittery investors that the Philippines is able to service its debt following Arroyo's statement on Monday that the country was in the throes of a fiscal crisis. Socio-economic Planning Secretary Romulo Neri said Arroyo's comment appeared to be directed toward lawmakers reluctant to support higher taxes. Arroyo has proposed a series of new taxes intended to raise around 80 billion pesos (US$1.4 billion; euro 1.1 billion) to plug the deficit. Many lawmakers, however, have expressed reservations about the new taxes, saying the government could raise funds if it improved tax collection and stamped out corruption. Nearly 90 percent of the projected revenues for 2005 will come from taxes, while the remainder will be derived from other sources, such as fees and charges, and foreign grants, the budget department said in a statement. - AP
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