The Philippine government plans to increase spending and raise more revenue this year, Budget Undersecretary Laura Pascua said, as the nation seeks to sustain its recovery from last year’s global slump.
The government raised its 2010 spending budget for public works, salaries and debt payments to a record 1.62 trillion pesos ($35 billion) from a previous forecast of 1.58 trillion pesos, Pascua said. Revenue, including gains from the sale and lease of assets, may climb to 1.32 trillion pesos compared with an earlier estimate of 1.28 trillion pesos, she said.
President-elect Benigno Aquino, who takes over from Gloria Arroyo this month, has pledged to cut poverty in a nation where the World Bank estimates one in every four people live on less than $1.25 a day. Still, a budget deficit that is forecast to hold near a record this year may limit the government’s ability to spend to bolster growth.
“Our priorities are still education, health, agriculture and public outlays,” Budget Secretary Joaquin Lagonera said in a telephone interview in Manila today.
The government expects the budget shortfall to be little changed at 297.2 billion pesos this year from a record 298.5 billion pesos in 2009. The five-month deficit widened to 162.1 billion pesos, exceeding the first-half target.
Economic expansion in the Southeast Asian nation may accelerate to a range of 5 percent to 6 percent this year from 1.1 percent in 2009, officials predicted earlier this month. The $167 billion economy expanded 7.3 percent last quarter, the fastest pace in almost three years.