MANILA, MARCH 13, 2009
(STAR) Korea remains bullish on the Philippine economy as both countries commemorate the 60th year of diplomatic relations.

During a visit to The STAR office yesterday, Korean Ambassador Choi Joong-Kyung said Korea believes the Philippines has the potential to become one of the 10 biggest economies in the world, especially if problem areas are properly addressed, including some constitutional barriers and the high cost of electricity.

Ambassador Choi said power cost in the Philippines is twice the rate in Korea, which can dissuade potential investors.

“Even if the cost of labor is low, the electricity cost is the barrier,” Choi said.

But Choi is optimistic that the tourism and agriculture sectors in RP will continue to flourish.

Around 600,000 Koreans visit the Philippines every year.

Choi stressed that Korea is willing to share with the Philippines its development experience to turn the latter’s vast potential into a powerful economy.

Korea has been an ardent supporter of the Philippines, being one of the 10 biggest donors of official development assistance and the fifth leading contributor of foreign direct investment. - Cheeko Ruiz

National Government debt swells to P4.221 trillion in 2008 By Iris C. Gonzales Updated March 13, 2009 12:00 AM

MANILA, Philippines - The National Government’s debt swelled to P4.221 trillion in 2008 from the P3.712 trillion incurred in 2007, the Bureau of the Treasury reported yesterday.

The 2008 debt stock ballooned by P508.4 billion or 13.7 percent more than the previous year’s level, data showed.

Of the P4.221 trillion, the government owed P2.414 trillion to domestic creditors and P1.806 trillion to foreign lenders, data also showed.

The government’s domestic loans in 2008 rose by P213.2 billion compared to the P2.201 billion incurred in 2007 or an increase of 9.7 percent.

Similarly, the government’s foreign loans jumped to P1.806 trillion or P295 billion more than the P1.511 trillion recorded in 2007.

At P4.221 trillion, theoretically, each of the 90.4 million Filipinos is indebted by P46,692.50.

Compared to the government’s debt stock level as of end-November 2008 of P4.236 trillion, the National Government’s debt as of end-December 2008 is lower by 0.4 percent or P15 billion, data from the Treasury also showed.

“The decrease in the National Government’s foreign debt of P25 billion or 1.4 percent from the level as of end-November 2008 was due to the P5 billion net repayment and P52 billion appreciation of the peso against the US dollar,” the Treasury said.

On the other hand, the Treasury attributed the increase in domestic debt of P10 billion or 0.4 percent from the recorded end-November 2008 level to more issuances of Treasury bills and bonds.

The government relies heavily on foreign and domestic loans to pay maturing debts and finance its budgetary needs.

Through the years, fiscal authorities have been stepping up efforts to fix the country’s fiscal position.

In 2008, the National Government incurred a budget deficit of P68.1 billion which was below the P75 billion ceiling for the year but higher than the P12.4 billion deficit incurred in 2007, latest data from the Finance department showed.

For this year, the government hopes to contain the deficit at P177.2 billion, higher than the previous program of P102 billion.

Government economic managers revised the deficit ceiling for 2009 given the impact of the global financial turmoil on the Philippines.

Chief News Editor: Sol Jose Vanzi

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