2009 GDP GROWTH SEEN TO HIT FROM 0.7% TO 1.0% / RP DEBT: P4.833 TRILLION
MANILA, JANUARY 27, 2010 (STAR) By Iris C. Gonzales - The economy is estimated to have expanded from 0.7 percent to one percent last year, Socioeconomic Planning Secretary Augusto Santos said yesterday.
The low end of Santos’ projection is slighly below the official gross domestic product (GDP) range for 2009 of between 0.8 percent and 1.8 percent.
In the fourth quarter of last year, Santos said the economy likely expanded by 0.6 percent to 1.6 percent, boosted by Christmas spending and early election expenses.
The National Statistical Coordination Board is scheduled to release on Thursday the 2009 growth figures.
For the January to September 2009 period, economic growth hit 0.7 percent, below the government’s 2009 goal of 0.8 to 1.8 percent.
Officials said the economy had suffered severely last year due to the lingering impact of the global financial crisis and the twin effects of typhoons Ondoy and Pepeng which also battered large parts of Metro Manila and Luzon.
This year, officials expect the economy to improve with Finance Secretary Margarito Teves saying that GDP may expand by as much as four percent, along with the global economic recovery.
A four percent GDP growth is significantly higher than the 2.6 percent to 3.6 percent target set by the interagency Development Budget and Coordination Committee (DBCC) for the year.
Teves had said that a four percent growth may be achieved because the world economy is already on the steady path to recovery following the global financial turmoil which struck late 2007.
If the economy grows within the 2.6 to 3.6 percent target or possibly even four percent in 2010, this would help improve collections of the Bureau of Internal revenue (BIR) and the Bureau of Customs (BOC) which have been perennially falling short of their respective revenue targets.
RP debt seen to hit P4.833 trillion By Iris C. Gonzales (The Philippine Star) Updated January 27, 2010 12:00 AM
MANILA, Philippines - The government’s debt stock in 2010 is now expected to climb to P4.833 trillion, P110 billion above the previous estimate of P4.723 trillion because of the expected increase in the budget deficit for the year, latest data from the Department of Finance (DOF) showed.
The budget deficit in 2010 is now projected to climb to P293 billion from the previous program of P233.4 billion. With a wider budget gap, the government needs to borrow more from local and foreign lenders.
“It’s because of the deficit. Since we adjusted the program, we have to change the debt projections,” Finance Undersecretary Gil Beltran said.
Of the P4.833-trillion, the government is expected to borrow P2.822 trillion from domestic creditors and P2.011 trillion from foreign lenders.
As a percentage of gross domestic product (GDP), the P4.833-trillion programmed debt stock for 2010 is equivalent to 58 percent while the P4.689-trillion represents 56.7 percent, data from the department also showed.
Beltran said the higher deficit is only temporary as the government needs to continue pump-priming the economy because of the lingering impact of the global financial recession.
“We are working hard to raise revenues and to enhance our collections,” he said.
The Department of Finance 600F earlier planned to improve the debt to GDP ratio to 55.7 percent in 2009 and to 53.4 percent in 2010 but this program has been shelved as the country copes with the worldwide economic crisis.
According to the latest data from the Bureau of Treasury (BTr), the debt stock climbed to P4.424 trillion as of end-October 2009 following the issuance of $1 billion in global bonds during the month and the depreciation of the peso during the period.
Total outstanding debt increased by two percent or P86 billion from the end-September level of P4.338 trillion, of which the government owed P1.975 trillion or 45 percent to foreign creditors and P2.449 trillion or 55 percent to domestic creditors.
The Finance department said that because of the country’s high debt level, the government needs new sources of revenues.
These include measures to raise sin taxes, rationalize tax incentives and to simplify the country’s net income taxation system.
According to government estimates, the sin tax measure could raise as much as P19 to P20 billion in the first year of implementation, P30 to P40 billion in the second year, P40 to P50 billion in the third year and P60 to P70 billion in the fourth year.
The department said that the current tax structure is inequitable because products having the same current net retail price can be taxed differently if one was introduced before January 1997 and other one after 1997.
The government, meanwhile, expects to raise P10 billion a year from the measure seeking to rationalize fiscal incentives and another P6 billion a year from the measure seeking to simplify the country’s net income taxation scheme.
Imports rebound 4.1% in November By Rica D. Delfinado (The Philippine Star) Updated January 27, 2010 12:00 AM
MANILA, Philippines - Philippine imports rebounded by 4.1 percent in November last year, the first monthly growth recorded in 14 months, the National Statistics Office (NSO) reported yesterday.
The government statistics office said imports amounted to $3.626 billion in November from $3.484 billion in the same period in 2008. On a month-on-month basis, however, imports tumbled by 4.8 percent from October’s $3.808 billion.
The last time imports recorded an increase was in September 2008, just before the world plummeted into a period of financial turmoil from which it has yet to fully recover.
The government had earlier reported a similar turnaround in November exports, which increased 5.7 percent year-on-year to $3.71 billion for the first rise in 10 months.
For the first 11 months of the year, the country’s imports dropped 26.8 percent to $39.112 billion from the 2008 level of $53.445 billion.
Ron Rodrigo of DBP-Daiwa Securities said that the rise in overall imports “is reflective of what we’re now seeing as a modest growth in the economy.”
Simon Wong, an economist with Standard Chartered Bank, said the increase in November was weaker than expected, given the low base and high global oil prices.
“This reflects that both processing trade and domestic demand remained weak in the fourth quarter of last year,” Wong added.
Semiconductors and other items that are used to make products for the country’s key electronics exports fell 5.2 percent last November compared with a year earlier.
However, the turnaround was achieved through rises in fuel, industrial machinery and metals.
Purchases of electronic parts, which accounted for 33.6 percent of the total import bill, fell 5.2 percent to $1.219 billion in November last year from the $1.286-billion recorded in the same period in 2008. This was mainly caused by a 10.9-percent drop in semiconductor imports, which had the biggest share of electronic purchases at 23.9 prcent.
Electronic parts are mostly used in the country’s export industry.
Other key imports in November were fuel, electrical and industrial machinery, transport equipment, iron, steel and textiles.
Japan remained the country’s largest source of imports for the month with a 12-percent share, recording payments worth $433.86 million. This was a 10-percent drop from the November 2008 level of $483.78 million.
The United States came in second with $384.11 million or a 10.6 percent share of the total import bill, followed by Singapore ($319.35 million), China ($299.60 million), and Korea ($281.25 million).
The Bangko Sentral ng Pilipinas (BSP) expects imports to slip 25 percent in 2009 but grow 13 prcent to 15 percent in 2010. It expects exports to fall 25 percent in 2009 and rise by seven percent to nine percent this year.
Chief News Editor: Sol Jose Vanzi
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