By Eileen A. Mencias

The national government posted a smaller-than-programmed budget deficit of P65 billion to P67 billion in 2008, a source from the Development Budget Coordinating Committee said.

The government had initially programmed a deficit of P75 billion this year but revised it to around P160 billion.

Budget Undersecretary Laura Pascua said the DBCC kept the foreign exchange assumption of 45 to 48 pesos to the dollar and agreed that inflation would be lower this year.

Pascua said the lower inflation numbers should offset other factors. She said this year’s deficit numbers would be higher because of lower revenues.

The Philippines posted its lowest fiscal deficit of P9.4 billion in 2007, against the program of P63 billion, due mainly to huge privatization proceeds of over P90 billion.

DBCC sources said last year’s budget deficit was lower than the equivalent of 1 percent of the gross domestic product.

“We [DBCC] will meet again soon because we still have to do the quarterly targets for 2009,” Pascua told reporters. “When we review macro-economic changes, we will [have to] change the fiscal [targets].”

The government earlier said it was ready for a higher budget deficit to mitigate the impact of the global recession on the domestic economy. Last week, the International Monetary Fund said a P150-billion budget deficit for the Philippines was acceptable to ease the impact of the sharp downturn in the global economy.

The government wants to spend more this year, with the Finance Department planning to accelerate spending in the first half of the year. The department has urged Congress to pass reforms on so-called sin taxes that will yield an additional P20 billion to P30 billion revenues. The government also hopes to raise an additional P20 billion from privatization.