WB president James D. Wolfensohn in a meeting in Washington with President Arroyo, lauded the Philippine government’s effort to push through with economic reforms despite the current global economic downturn.
At the same time, Wolfensohn noted the need for the Arroyo administration to strengthen public expenditures and financial management, while beefing up public revenues and ensuring fiscal sustainability.
The WB, one of the country’s biggest multilateral creditor, has always been concerned about containing the budget deficit which last year ballooned to P136.1 billion from the programmed deficit of just P62 billion.
The WB, like other creditors, are urging government where it has extensive exposure to tame their budget gap. It also frowns on government’s tack of trimming expenditures to cut the deficit.
The Bank said keeping the budget deficit on course is critical to restoring investor confidence in the Philippines.
In the Washington meeting, Mrs. Arroyo’s economic team led by Finance Secretary Jose Isidro Camacho assured the WB of government’s commitment to keep this year’s budget deficit target.
The WB representatives and some of the members of Arroyo’s economic team led the signing of several loans granted by the Bank for various infrastructure projects.