, 2010 (STAR)  (Xinhua) -- The Philippine government said on Thursday that it remains confident that Filipinos based in Greece and other countries in Europe would not be affected by Greece's debt crisis.

Deputy Presidential Spokesperson Gary Olivar also said that the Philippines is counting on the European community to avert the deterioration of the debt crisis in Greece into another global crisis.

Asked about the welfare of Filipino workers in Greece and nearby countries in view of the development, Olivar said, "We are confident that our OFWs (overseas Filipino workers) in those countries at risk will remain employed or employable, whether there or elsewhere, and that the spreading global recovery will not be affected by what happens in those countries."

Olivar made the statement when asked about concerns that the debt crisis in Greece may spread to other countries such as Spain, Portugal and Ireland and possibly lead to another global financial crisis.

"We trust that any contagion from the debt crisis in Greece will be properly contained by its neighboring countries with the assistance of existing protocols within the European community," he said.

Peso continues to depreciate, closes at 45.385 By Lawrence Agcaoili (The Philippine Star) Updated May 07, 2010 12:00 AM

MANILA, Philippines - The peso weakened by 37.5 centavos to close at P45.385 to $1 yesterday after retracing the P45-to-$1 level last Wednesday. The currency opened weaker at P45.14 to $1 from Wednesday’s P45.01 to $1 before depreciating further to an intra-day low of P45.44 to $1.

A total of $1.814 billion changed hands yesterday at the Philippine Dealing and Exchange Corp. or higher than Wednesday’s volume of $1.103 billion.

The Bangko Sentral ng Pilipinas (BSP) is tweaking the government’s foreign exchange target due to the continued strengthening of the peso against the US dollar on the back of the country’s strong international reserves, sustained remittances from overseas Filipinos, and recovering export earnings.

Sources said the BSP’s Monetary Board is now discussing the proposal to revise the foreign exchange assumption to a range of P45 to P47 per $1 from the previous forecast of P46 to P49 per $1 as the peso continued to appreciate against the greenback hitting a fresh 20-month high after piercing the P44 to $1 barrier recently.

The proposed changes to the value of the peso against the greenback was stronger than the proposed range of P46 to P48 per $1 of the executive technical board of the DBCC.

Data from the BSP showed that the peso strengthened by 3.38 percent to average P46.0272 to $1 as of end-March from the end-December level of P47.6372 to $1. The peso hit a fresh 20-month high after closing at P44.23 to $1 last April 23.

RP may be unable to balance budget by 2013 - Goldman Sachs By Iris C. Gonzales (The Philippine Star) Updated May 07, 2010 12:00 AM

MANILA, Philippines - The government is at risk of missing its goal to balance the budget by 2013 given its problematic tax effort, global investment bank Goldman Sachs said in a report on the Philippines.

Goldman said tax revenues have declined over the last three years, putting the balanced budget goal at risk.

“The government’s current plan to balance the budget by 2013 is becoming a challenge as tax revenues continue to be a low 13 percent of gross domestic product, showing a decline over the last three years,” Goldman Sachs said in its report.

Last year, the government’s tax effort slid to 12.8 percent or way below the programmed 14.4 percent for 2009 due to a host of reasons including rampant corruption, weakened economy and the implementation of so-called revenue-eroding measures.

The tax effort measures the government’s ability to increase tax collection that is commensurate with the growth of the economy.

The economy, as measured by gross domestic product, grew 0.9 percent in 2009 from the 3.8 percent recorded in 2008.

The 2009 tax ratio was also lower than the 14.13 percent recorded in 2008.

Goldman Sachs said that while the fiscal stimulus package has been helpful and has “supported growth” through the crisis, authorities should now revert to fiscal consolidation.

“The fiscal stimulus supported growth through the crisis but now fiscal consolidation is increasingly becoming the need of the hour and investors are looking for a clear and realistic consolidation roadmap,” it said.

Furthermore, Goldman Sachs said that after the May elections, the government should focus on fiscal consolidation by passing revenue measures that would rationalize fiscal incentives, raise excise taxes on alcohol and cigarettes and simplify the country’s net income taxation scheme.

Despite concerns on the fiscal consolidation, Goldman Sachs expects the Philippine economy to grow by 4.2 percent this year, above the official forecast of 2.6 percent to 3.6 percent and higher than the 0.9 percent recorded in 2009.

The interagency Development Budget Coordination Committee (DBCC), said is looking at moving the balanced budget goal to either 2015 or 2016 given the problematic revenues and higher expenditures.

Chief News Editor: Sol Jose Vanzi

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