Palace: 2009 to end with economy in good shape

MANILA, Philippines - Malacañang remained confident yesterday that the economy would be in good shape by yearend even though the deficit for the first 10 months has already breached the full-year target of P250 billion.

Deputy presidential spokesperson for economic affairs Gary Olivar said that the Palace shares the same optimism as Finance Secretary Margarito Teves about the economy avoiding the worst-case scenario.

Olivar said the worst-case scenario involves the deficit going over P300 billion for the year, which could be avoided with the commitment of revenue collection agencies to improve tax collection efforts.

He said that there are at least two cases where at least P9 billion in Customs duties could be collected.

He cited the P7.34 billion in unpaid excise taxes that the Bureau of Customs intends to collect from Pilipinas Shell Petroleum Corp. and the P1.7 billion in Customs duties that the Presidential Anti-Smuggling Group is looking to collect from two firms that illegally brought in plastics, resins and textiles to the country.

The government has set a target deficit of P250 billion for the year, so at P266 billion for the first 10 months of the year, the target has already been breached by P16 billion.

Olivar argued that if the government succeeds in collecting the two multi-billion peso cases, then it would already cut by more than half the P16 billion.

“So I’m not unduly alarmed and I understand why Secretary Teves remains optimistic that with the proper revenue measures in place, stricter collection and then of course global recovery continuing, we should be able to come in okay for the year,” he added.

Olivar reiterated that the breach of the deficit target did not come as a surprise because of the continued weakness of the global economy and the unexpected expenditures brought about by the recent storms that hit most of Luzon.

He said that several measures should also be in place to make up for the revenue shortfall, including the passage by Congress of a number of key revenue raising measures.