The Philippine government is looking at a possible P40 billion ($900 million) budget deficit this year depending on how the economy performs in the second half, a senior official said on Wednesday.
"It's arbitrary right now but the medium scenario would be roughly about 40 billion pesos," said Finance Secretary Margarito Teves. "We are looking at 75 billion pesos worst case."
Skyrocketing food and fuel prices forced the government to abandon its goal of a balanced budget this year and also cut its 2008 growth target to 5.7-6.5 percent from 6.3-7.0 percent.
Manila plans to raise spending this year to help Filipinos deal with soaring food and fuel prices and is considering additional borrowings, both foreign and domestic, to bridge the gap.
Earlier this month, Teves said the Philippines may tap up to $750 million from international debt markets later this year, a turnaround from the first quarter, when the country said it had fulfilled its international borrowing requirement with a $500 million bond sale in January.
A balanced budget, once the centerpiece of President Arroyo's economic plan, has been shelved until 2010 -- the original target under the government's medium-term plan.