MANILA, Philippines – The Development Budget and Coordination Committee (DBCC), the inter-agency group that sets the country’s macroeconomic assumptions, is likely to revise downward the economic growth forecasts and budget deficit ceiling for 2009 due to the global financial turmoil, Finance Secretary Margarito Teves said.
“That is the direction (lower gross domestic product targets) and that is the reason why adjustments have to be made also on the revenue side,” he told reporters.
The government earlier revised downwards it GDP target for 2009 to 3.7 percent to 4.4 percent from the previous GDP growth forecast range of 3.7 percent to 4.7 percent for the year.
When asked if the government would also revise downward its latest budget deficit ceiling for 2009 of P177.2 billion, Teves pointed out this could also change anew.
The government had previously set a deficit ceiling of P102 billion for 2009.
Teves said the DBCC is scheduled to meet again on April 16 to finalize the changes.
Asked whether the DBCC would be adopting the P257- billion to P300-billion deficit forecast of Socioeconomic Planning Secretary Ralph Recto for 2009, the Finance chief said it was too early to say.
Recto had said the figures are based on the latest assessment of the National Economic and Development Authority (NEDA) of the economy this year.
NEDA is set to recommend this worst-case scenario to the DBCC for consideration, Recto had said.
The deficit target, the NEDA chief added, also considers the possibility that the government may not be able to privatize any state-owned asset this year because of poor economic conditions.
In the first two months of the year, the government’s fiscal gap already swelled to P67 billion, more than double the P32.9 billion recorded in the same period last year.
On the other hand, the Finance chief said the DBCC is likely to revise inflation downward due to easing oil and commodity prices. The latest inflation forecast of the government is three percent to five percent for 2009.