Philippines plans to raise more revenue

Manila: The Philippines plans to raise more revenue next year, Budget Secretary Florencio Abad said yesterday in the nation's capital.

The increased revenue will enable the government to reduce the budget deficit even as it increases its spending. It hopes that this will boost growth in the country.

The Philippines government's revenue may rise to 1.46 trillion pesos (Dh115.79 billion) in 2011, Abad said in a briefing in Manila. That compares with a planned 1.29 trillion pesos this year.

Spending on public works, salaries and debt payments may total 1.757 trillion pesos, he said. That amounts to an 8.5 per cent increase compared to the the 2010 budget, which was announced earlier this month.

Philippine economic expansion has lagged behind its neighbours. This has been due, in large part, to tax evasion and smuggling which resulted in budget deficits in 21 of the past 25 years.

President Benigno Aquino, who took office on June 30, plans to accelerate growth to as much as 8 per cent in 2011. In his attempts to do so, he seeks to cut poverty. In the Philippines, the World Bank estimates that one in every four people live on less than $1.25 a day.

Budget deficit

The budget deficit may narrow from a record this year to 298.6 billion pesos in 2011, said Abad. This is the equivalent to 3.3 per cent of gross domestic product. The government forecasts a 325 billion peso shortfall for 2010. This is equal to 3.9 per cent of the country's gross domestic product.

The deficit in the first six months of the year was 196.7 billion pesos. This amount exceeded the previous government's estimate for a gap of 178.5 billion pesos. The $167 billion Southeast Asian economy expanded 7.3 per cent in the first quarter. This is the fastest pace in almost three years.