WORLD BANK HAILS RP FISCAL PERFORMANCE
MANILA, MARCH 3, 2008 (STAR) By Iris C. Gonzales - The World Bank (WB) has lauded the government’s fiscal efforts, noting that the budget deficit is almost zero.
Nevertheless, the Washington-based institution is ready to extend at least $800 million a year or $1.7 billion for the next two years if the Philippine government needs financial assistance.
Bert Hofman, World Bank’s Philippines country head said the amount is in the lender’s updated country assistance strategy program earlier agreed upon with the government.
Hofman, however, noted that fiscal authorities are doing good in their efforts to contain the deficit and may not need to borrow as much.
“Right now they are doing relatively in the fiscal side so they have not as much need as before to borrow so they probably won’t make it to $850 million,” he told reporters over the weekend.
But while he noted that the government’s budget deficit is almost zero, he said that a lot of the deficit reduction has come from expenditure reduction.
This, he said, means that “not enough were spent on a couple of things such as infrastructure, health care and education.”
The World Bank hopes to see the tax-to-gross domestic product (GDP) ratio go up so the government can do more.
“The other area that we feel is very important for development performance is the investment climate in the Philippines. Investment is still relatively low and it is not that easy to invest and there is a lot of difficulties in investing in the Philippines not only because of the rules and regulations but also the competitive situation has its challenges. So we hope to see some improvements there then we could even further increase our commitments,” Hofman said.
The government hopes to balance the budget this year after decades of incurring deficits. Last year, the deficit stood at P9.4 billion.
The Bureau of Internal Revenue (BIR) has a collection goal of P845 billion while the Bureau of Customs (BOC) has a revenue target of P254 billion.
Multilateral lenders such as the World Bank are keeping a close watch on the government and whether it would be able to meet its goal of balancing the budget this year.
Chief News Editor: Sol Jose Vanzi
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