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2007-11-20 03:45:00 p.m. HKT, XFNA
Philippines posts smaller-than-target budget deficit for October - UPDATE
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(Recasts, updates with more comments from official)
MANILA (Thomson Financial) - The sale of state assets helped the
Philippine government post a smaller-than-expected budget deficit of 1.5
billion pesos in October and puts it on track to beat the full-year target,
Finance Secretary Margarito Teves said Tuesday.
Last month's deficit was smaller than the target of 3.8 billion pesos,
and much less than the deficits of 5.8 billion pesos a year earlier and 14.5
billion pesos in September, government data showed.
For the first 10 months, the budget gap was 41.5 billion pesos, about
two-thirds of the full-year goal, and narrower than the deficit of 56.3
billion pesos in the same period last year.
""This shows that we are well on track to meeting the programmed deficit
ceiling of 63 billion pesos this year,"" Teves told reporters.
The government booked 1.2 billion pesos in additional revenue last month
from the sale of a 54.5-hectare property in central Philippines to real
estate developer Megaworld Corp, he said.
This one-off gain helped offset the impact of disappointing tax
collections at the Bureau of Internal Revenue and the Bureau of Customs, he
said.
""There is a likelihood the full-year deficit will be below 63 billion
pesos, taking into account the revenue from asset sales,"" Teves said. In
2006, the budget gap reached 64.8 billion pesos or about 1 percent of the
gross domestic product.
More asset sales
The government is expecting to raise more revenue from the sale of its
remaining stake in geothermal power producer PNOC Energy Development Corp.
Bidders for a controlling 60 percent stake in PNOC-EDC have until
Wednesday to submit their offers.
Up for sale are the government's 46.7 percent stake comprising about 6
billion common shares and the PNOC-EDC Retirement Fund's 13.3 percent.
About 42 billion pesos may be raised from the sale of the government's
shares in PNOC-EDC, based on the stock's closing price of 7 pesos on Tuesday.
In 2008, about 30 billion pesos may be raised from the sale of assets,
which include the state's stake in food and beverage conglomerate San Miguel
Corp, Teves said.
The government is hoping to attain a balanced budget next year, putting
an end to a decade of deficits that had bloated public debt.
""We believe that additional revenues from non-tax sources are necessary
to enable us to fund vital infrastructure and social services which are
needed to sustain economic growth,"" he said.
International credit rating agencies, however, do not count proceeds from
asset sales as part of the overall revenue. As such, they expect the 2007
budget deficit to be bigger than the target of 63 billion pesos.
Fitch Ratings has projected a deficit of 125 billion pesos this year.
The country's sovereign credit ratings remain below investment grade as
rating agencies are seeking further improvement in revenue through more
efficient tax collections.
(1 US dollar = 43.50 pesos)
rocel.felix@thomson.com ed/jm/ed/ms
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