HONG KONG AND MANILA—The Philippines, burdened with rising interest payments and higher subsidies, will double the cash it plans to raise from asset sales this year to fund spending on rice and fuel, Finance Secretary Gary Teves said.

The government may raise P60 billion, double the P30-billion target this year, Teves said in a Bloomberg Television interview in Manila. The additional cash may be raised from selling stakes Petron Corp., the country’s largest oil refiner, and PNOC Exploration Corp., he said.

The Southeast Asian nation has deferred its goal of ending a decade of budget deficits this year as it boosts spending on rice and increases its subsidy on fuel.

Teves said the government may also have to increase foreign-debt interest payments because of the peso’s decline.

It’s “much more difficult, more stressful” to balance the budget, Teves said in the interview before the Cabinet-level Development Budget Coordinating Committee approved as much as P75 billion in deficit spending this year. “It’s something we haven’t abandoned, but it’s not a sacrosanct goal.”

Balancing the budget “remains our priority,” Philippine President Gloria Arroyo said, also before the committee meeting. The government can increase revenue collection without introducing new taxes, she said.

The government narrowed its deficit to P25.8 billion in the first four months of the year as tax agencies exceeded collection targets in April. Should tax revenue be insufficient, Teves said the government may sell the 40-percent stake in Petron.

A deficit equivalent to 1.5 percent of gross domestic output is “acceptable,” said Simon Wong, an economist at Standard Chartered Bank in Hong Kong. “If the price of balancing the budget comes with a recession, it won’t be good.”

Economic growth may slow to between 6.1 percent and 6.7 percent this year as rising commodity prices damp consumer spending, Teves said on May 19. The economy grew 7.3 percent in 2007, the fastest annual pace in 31 years.

The government has since approved a lower economic growth target and higher inflation-rate estimate, Teves said.  (Bloomberg)

PUERTO PRINCESA—Philippine exporters would like to see the exchange rate hover at the P43.50 level for “quite a while” as it reflects the real value of the peso against the US dollar.

THE peso yesterday plunged to a seven-month low, closing at P43.925 per dollar after oil prices advanced to $130.21 per barrel in the world market, prompting investors to buy more dollars in anticipation of demand from oil companies, currency traders said.

THE Philippine government will likely push its revenue and customs agencies to exceed collection targets to meet the budget deficit programmed for the year.

HONG KONG AND MANILA—The Philippines, burdened with rising interest payments and higher subsidies, will double the cash it plans to raise from asset sales this year to fund spending on rice and fuel, Finance Secretary Gary Teves said.

THE United Coconut Planters Bank (UCPB) has posted a 54-percent increase in consumer-loan bookings, boosted by a 15-percent, or P4.3 billion, growth in current and savings accounts, or Casa, for the first quarter of the year.