Palace: Huge public spending resulted in economic ‘growth’
The government spent a lot more than it earned, so that the economy could be stimulated and âremain resilient" amid global recession. This was how the Palace on Saturday defended itself from criticism hurled against the outgoing administration of Mrs. Gloria Macapagal-Arroyo that it is leaving the country a budget deficit of P340 billion, the largest so far in our history. Deputy Presidential Spokesperson Gary Olivar said that with the deficit also comes the highest gross domestic product (GDP) ever posted, which he attributed to the governmentâs efforts to âpump-prime" the economy. GDP is a standard indicator of a country's overall economic output, measured as the total market value of all final goods and services made within the country in a year. âDapat nating tandaan na ang GDP sa ilalim ni Pangulong Arroyo ay pinakamataas din sa ating kasaysayan," Olivar said Saturday in a live interview by Mariz Umali on GMA Newsâ Balitanghali. (Let us remember that the GDP under President Arroyo is also the highest in our history.)
Olivar was reacting to statements made earlier by Sen. Francis Escudero, chairman of the Senate committee on banks, financial institutions and currencies, that Mrs. Arroyo is passing on to the incoming Aquino presidency the biggest fiscal shortfall ever. Escudero also criticized Mrs. Arroyo for having spent close to P3 billion in foreign trips in the last nine years. âThe government had spent much for economic stimulus plans so our economy would remain resilient despite the global recession," Olivar said. âManageable deficitâ This year, the budget deficit from January to May has already ballooned to P162.1 billion, partly due to higher disbursements following the destructive typhoons that hit the country late last year. This figure went beyond the P145.2-billion target deficit for the period. For the entire year 2009, the government incurred a budget shortfall of P298.5 billion. This had bypassed the highest recorded deficit at P210.7 billion in 2002, a year after Mrs. Arroyo came to power. On the other hand, the 2009 deficit represented only 3.9 percent of the GDP, as compared to the 2002 deficit, which was 5.3 percent of that yearâs GDP. âThe deficit is anywhere between 2.5 to less than four percent of the GDP in this caseâsomething that is manageable," Olivar said in Filipino.