Macroeconomic Forecast Philippines

In offsetting the global economic crisis, we expect the Philippines to run a large fiscal deficit for 2009, amounting to PHP291.5bn (US$6.2bn, or 3.9% of GDP). Indeed, Philippine Finance Secretary Margarito Tevas on October 19 revealed that the government revenue shortfall in September came in at PHP27.5bn, which was 27.3% higher than the PHP53.4bn registered in the same month a year ago. This brought the total fiscal deficit for the January-September period to PHP237.5bn, reaching 81.5% of our forecast for 2009. However as economic conditions improve, we forecast the budget gap to shrink to 3.5% of GDP (or PHP282.3bn) in 2010.

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