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THE job
is not yet done.
That was
how Standard & Poor’s analyst Agost Bernard summarized
the government’s effort at consolidating the gains of
the public-sector.
He told
reporters the main restraint to continued public sector
gains was Manila’s weak revenue base.
“The
country’s revenue base remains fundamentally
insufficient. That’s generally understood,” Bernard said
at a press chat the Investor Relations Office arranged
for him Wednesday.
His
comments strengthened speculation that S&P, unlike
Moody’s Investor Service which earlier announced an
upgrade in the country’s credit outlook, was not
prepared to follow suit.
According to government data, tax revenues in 2007
failed to match the P1-trillion target by P71.1 billion,
with actual collection at only P932 billion.
The
lower-than-target deficit of P9.4 billion instead of the
anticipated P53.6 billion was muted only by asset- sale
proceeds of some P90 billion.
Bernard
said the revenue agencies understood the need to improve
their performance this year to help achieve the
zero-deficit scenario the government had promised.
He
acknowledged the great strides the fiscal sector
achieved last year, but pointed out the “key task is to
continue to consolidate and not let it regress to higher
deficit or increased borrowing” this year.
“That
there had been less government is visible in improved
investor confidence [on the Philippines]. But the key
here has to be that the consolidation be entrenched. The
job is not yet done,” he reiterated.
Looking
outward, he said
Manila
remains vulnerable to two things.
One was
decreased demand for Philippine exports as consequence
to the feared slowdown in the
US,
Manila’s main export market.
He
particularly worried over the electronics subsector that
accounts for more or less 60 percent of total.
Another
was the likelihood of increased investor aversion for
emerging markets like the Philippines, resulting in less
inflow from investments or loans.
“But I
must add that given the much-improved macroeconomic
fundamentals, the Philippines faces it at a considerably
less vulnerable position,” Bernard said. |
