Monday October 19, 6:42 PM
Philippines warns of tough times as deficit soars
The Philippines announced on Monday a wider-than-expected budget deficit and warned of more tough economic times ahead with scarce funds having to be spent on disaster reconstruction efforts.
The deficit soared to 237.5 billion pesos (5.08 billion dollars) in the nine months to September, up 345 percent from a year earlier and 19.9 billion pesos over the government's target ceiling, Finance Secretary Margarito Teves said.
"We are really facing tough times," Teves said as he announced the government was considering selling assets to help balance the books.
"Our revenue collection efforts are seriously hampered by the slowdown in economic activities and tax breaks that were granted largely through legislation."
However Teves said the government had to find extra money to pay for reconstruction programmes after tropical storms Ketsana and Parma caused billions of dollars in damage on the main island of Luzon over the past month.
"We need to spend for the urgent needs of our people, especially for the relief and rehabilitation of calamity-stricken provinces," he said.
"Millions of crops were damaged and a number of bridges were destroyed. We need the resources to rebuild and fortify our economy."
Ketsana pounded Manila with the heaviest rains in more than four decades on September 26. Parma then struck on October 3, destroying crops and triggering landslides across the mountainous north of Luzon.
Aside from destroying rice farms, fisheries, roads, hospitals and bridges, the storms claimed nearly 1,000 lives.
The government had already sold one billion dollars worth of US bonds last week to raise some much-needed cash, and Teves said the government was looking at selling state assets to further fund reconstruction efforts.
"We remain hopeful that we will be able to dispose of government assets before the end of the year that could help us generate additional revenues for our rehabilitation and reconstruction efforts," he said.
Teves did not elaborate on what assets may be sold.
Teves said nine-month revenues reached 839.8 billion, or 74.4 billion pesos short of the government's target.
Spending rose 15.4 percent to 1.077 trillion pesos, partly to finance a stimulus package to help the economy during the global meltdown.
The September deficit reached 27.5 billion, higher than the 21.6 billion pesos incurred during the same month last year.
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