Wednesday, 16 June 2010

Budget deficit compared to other Asian countries

Emil Jurado
To the Point
Manila Standard
http://www.manilastandardtoday.com/insideOpinion.htm?f=2010/june/16/emiljurado.isx&d=2010/june/16

There’s so much talk about the incoming Aquino administration inheriting a gargantuan budget deficit. They say that the budget deficit could hit over P325 billion, much more than the deficit of P298.5 billion in 2009.

I don’t know what these doomsayers are after, but if it comes to the point that the country will have a deficit which is 4.4 percent of the gross domestic product, it will be much less than the 7.8 percent of Malaysia; the 4.6 percent of Thailand and certainly the 8.3 percent of Vietnam. And look at the economies of Malaysia, Thailand and Vietnam. They are improving by leaps and bounds!. In fact, only Indonesia, with a deficit-to-GDP ratio of 2.3 percent and Singapore with 3.5 percent did better than the Philippines.

The point I am driving at is that there’s so much obsession about government deficits and indebtedness that other factors are forgotten. Incoming President Noynoy Aquino, having finished economics at the Ateneo and having been a student of outgoing President Arroyo, should know all these.

Santa Banana, in spite of the economic ‘‘tsunami’’ that hit the world, and despite recession hitting Asia, the Philippines has remained recession-free. Inflation, which hits the poor the most, is held in check.

I didn’t finish economics at the Ateneo as the President-elect did but I did take up economics as a subject as I was pursuing my Bachelor of Arts. And I know that it’s the bottom line that counts—the outgoing President is leaving the economy sound and stable.

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