Teves: RP may breach 2009 deficit goal
Reuters | 11/04/2009 6:50 PM
Printer-friendly version | 
Send to friend | 
Share your views
MANILA - The Philippines said on Wednesday it will likely exceed its record 2009 budget deficit goal as it spends more on reconstruction following 2 strong typhoons and despite planned assets sales this year.
The budget gap swelled to 95% of this year's P250-billion ($5.2 billion) target in the first 9 months, and the government's biggest revenue agency looks set to miss its collection goal this year due to a slow economy.
"We will be hard-pressed to meet the target," said Joel Tan-Torres, acting commissioner of the Bureau of Internal Revenue (BIR) which delivers around two-thirds of total revenue.
Manila wants to sell the 103-hectare Food Terminals Inc (FTI) commercial estate it had valued at around $279 million and a 40% stake in oil-and-gas explorer PNOC-Exploration Corp. (PNOC-EC), worth about P11 billion, before the year end.
"Even with the PNOC-EC and FTI sale, because of Typhoon Ondoy and Pepeng, we will likely breach the target," Finance Secretary Margarito Teves told reporters.
Investors widely expect the government to overshoot its deficit target and the bond market was unmoved following the comments.
Teves' statement came a few days after the head of the BIR resigned over the agency's failure to meet its collection targets.
The BIR collected P557 billion in January to September, and needs to bring in P241.5 billion in the last quarter of the year to meet its 2009 revenue goal.
Some analysts said investors would not be alarmed if it saw a 2009 budget deficit around P275 billion to P285 billion, or an overshoot of P25 billion to P35, given the tough economic environment.
But some economists forecast the budget gap to hit as much as P350 billion in a Reuters poll in September, higher than the government's worst-case fiscal deficit scenario of P300 billion.
Despite the wider-than-expected budget deficit, the government would likely sell Samurai bonds to plug its budget deficit early next year, said Rosalia de Leon, head of the international finance group at the Finance department.
Manila previously said it wanted to sell around $500 million of the yen bonds before the year ends.
But with the government and the Japan Bank for International Cooperation (JBIC) yet to agree on the guarantee pricing, the chances of a Samurai bond sale this year were "narrow," de Leon said.
State-backed JBIC has guaranteed up to $1 billion of the country's planned yen bond sale up to the middle of 2011.
Comments