Manila adds P35b more to stimulus fund

THE government has raised its programmed spending next year by P35 billion to bankroll the stimulus package of the Arroyo administration and keep the economy from sliding into recession.

Expenditures for 2010 will amount to P1.56 trillion, up 2.3 percent from this year’s P1.534 trillion, according to data from the Development Budget Coordination Committee.

The P35 billion will be spent for social services and infrastructure projects, according to the Department of Budget and Management.

“This administration is finishing the priority programs and projects that it has started. These will lay down the foundation for growth and an improved quality of life for our future generations,” Budget Secretary Rolando Andaya Jr. said.

The government also plans to have a wider deficit of P233.4, billion, equivalent to 2.8 percent of the gross domestic product, for 2010.

Deficit spending for 2010 was earlier projected at P208.4 billion, or 2.5 percent of the GDP.

Next year’s shortfall is lower than the record P250 billion, or 3.2 percent of the GDP, expected this year.

The Arroyo administration this year launched a P330-billion stimulus package, dubbed as the Economic Resiliency Plan, to keep the economy afloat.

Because of the global slowdown, the country’s economy is expected to expand between 0.8 percent and 1.8 percent this year, sharply down from 4.6 percent in 2008.

The higher budget deficit will result from the release of P200 billion needed for the Economic Resiliency Plan II next year, when growth is expected to pick up to a range of 2.6 percent to 3.6 percent.

Meanwhile, the Finance Department reported that the public sector’s consolidated fiscal position registered a P28.76-billion surplus, equivalent to 0.4 percent of the GDP and 34.3 percent wider than the year earlier numbers.

The 14 government-owned-and-controlled corporations last year incurred a combined deficit of P27.7 billion, a complete turnaround from the P57.9-billion surplus in 2007, as the Arroyo administration allowed them to pump-prime the economy. –Lawrence Agcaoili, Manila Standard TOday