Philippines can maintain fiscal stability: President Arroyo

Philippine President Gloria Macapagal-Arroyo assured to the visiting team of the International Monetary Fund (IMF) on Monday the country's economic managers can maintain fiscal stability.

"The IMF need not be concerned about the Philippines' commitment to fiscal stability which has been duly recognized through our successive credit rating upgrades," Deputy Presidential Spokesperson Gary Olivar said in a statement.

The dwindling revenues combined with stimulus spending and post-calamity reconstruction programs have led to a huge budget deficit. With the fiscal deficit hitting 266.1 billion pesos (5.6 billion U.S. dollars) by end-October, or 16.1 billion pesos (341.1 million U.S. dollars) more than what was programmed for the whole year, the IMF is asking how the Philippine government can close narrow a huge deficit.

But Olivar noted that despite increased government spending, the country's deficit-to-GDP ratio remains manageable and under 4 percent.

"Fiscal space remains ample," Olivar said, adding that the government is redoubling tax collections, lobbying the Congress to pass laws to raise revenues and are selling state-owned assets to close the budget gap.

A visiting IMF mission is in Manila this week in line with the so-called Article IV of the agreement with member countries.

A senior Philippine economic manager said the IMF team is interested to know how the Philippine government can improve its tax collection.

Source: Xinhua