With the recent global financial turmoil
Balancing RP budget
should not be a priority - Angara

Senator Edgardo J. Angara today stressed that the Department of Finance should not attempt to balance the budget this year, saying it will only waste time and energy.

"Deficit spending is a tool of development; that's not something that you aspire to, especially if you are a developing country. However, what the government needs is good fiscal and financial management," said Angara, who chairs Senate Committee on Banks, Financial Institutions and Currencies.

He added, "I don't know why we are so obsessed with satisfying rating agencies. Will they give us medals if we balance it anyway? Rating agencies will credit us for fiscal and financial management, if we improve the tax system more revenues will come in, and good, sound financial system."

Instead of aiming for balanced budget, Angara urged the Finance department to pump-prime the economy instead.

In the advent of global financial turbulence, Angara said that balancing the budget should not be a priority. Instead, the government must actually look into how the country will be able to absorb shock from this crisis.

"Reforms such as the amendment of the charter that will authorize the Central Bank to extend its supervision to subsidiaries and affiliates must be carefully considered. Because now, you can really isolate some financial institution of banks by incorporating them separately," Angara said.

He added, "With this amendment, you can extend supervision to those affiliates."

Meanwhile, Angara also asked the Economic department to look at the whole economy at a macro- level, to carefully review the macro economic assumptions on inflation, import and export receipts, and on inflation on currency exchange.

Revised assumptions have to be submitted the earliest possible time while the 2009 is under deliberation.