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THE
government may abandon a plan to balance the budget this
year should it need to boost spending to spur the
economy amid a US slowdown, Finance Secretary Gary Teves
said Wednesday.
“We
cannot be sacrosanct about these things,” Teves said in
an interview. “We are not going to balance the budget
for its own sake. Suppose there’s a long slowdown, we
have to do something to protect the economy.”
President Arroyo approved a P75-billion stimulus plan to
help the economy weather a slowdown in the
US,
Albay Gov. Joey Salceda said Tuesday. Moody’s Investors
Service last week raised its outlook on the Philippines’
debt rating to positive from stable, citing an improving
economy and narrowing deficit.
Any
ratings implications “really depend on the size of the
deficit being proposed and how the government plans to
finance it,” Moody’s senior vice president Tom Byrne
said from
Singapore
yesterday. “If it’s a temporary adjustment of the
long-term fiscal policy, that wouldn’t be negative.”
Arroyo’s
efforts to cut 10 years of deficits increased demand for
the nation’s debt, sending yields on the benchmark
10-year bond to 6.046 percent Tuesday from 10.2 percent
at the beginning of 2006.
Teves
said the government sold its stake in Manila Electric
Co. to state-run Government Service Insurance System for
between P6 billion and P8 billion. The government may
sell more assets to help balance the budget or narrow
any deficit, he said.
Moody’s
rates Philippine debt B1, four levels below investment
grade, the same as Pakistan and Cambodia. Fitch Ratings
and Standard & Poor’s rate Philippine debt two and three
levels below investment grade, with stable outlooks.
Arroyo
still has to get authority from Congress to approve her
spending plan, which includes tax rebates, Salceda said.
Under
the package, National Power Corp., the state-owned
electricity generator, may get a subsidy from state
natural gas royalties to help cap prices. The plan also
includes giving water utility discounts and school
vouchers. |
