RP eyes 3-4 percent growth this year

The government will continue spending to stimulate the economy and create jobs, as it aims to grow by 3-4 percent this year. Finance Secretary Margarito Teves said on Friday the country was on the path of recovery after being battered by two major typhoons last year amid the global economic slump. "Like other economies, we are on a recovery path, although at a modest pace. This year, we expect growth in the order of 3-4 percent and reach our long-term growth rate of 5-6 percent in 2012," he said in a forum hosted by the Asian Development Bank (ADB). To achieve this, the government would continue spending, even as it tries to bridge the fiscal gap, Teves said. "We will continue stimulus spending this year although at a lower level, consistent with the intention to trim our budget deficit from an estimated 3.7 percent of the gross domestic product (GDP) last year to 3.5 percent of this year," he added. At the end of November, the budget deficit was already P22.5 billion past the P250-billion ceiling for the year due to weak tax collections and state failure to sell big-ticket assets. The government now expects 2009 budget gap to hit slightly below P300 billion. This the budget gap is expected to hit P293 billion, above the initial estimate of P233 billion. Teves said the government was intensifying tax administration measures to raise revenues for infrastructure and social services, as well as generate funds to rebuild areas damaged by recent typhoons. "We continue to exercise prudence in our borrowings and persist on improving our tax collection as we remain mindful of our high debt burden compared with our peers in the region," the Finance chief said. The government's debt-to-GDP ratio is projected to go down to 46 percent in 2013 from a record of 57.6 percent in 2009 and 53.4 percent expected this year. Under its fiscal consolidation plan, the government hopes to wipe out the budget gap by 2013, five years later than originally planned. — GMANews.TV