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President Gloria Arroyo urged Congress on Friday to pass a
P1.415-trillion ($30.2-billion) budget providing more money for
infrastructure and food aid amid a global economic downturn.
Meanwhile across the globe, Agence France-Presse
reported that world stock markets tumbled because of a weak global
economic outlook.
In Manila, President Arroyo’s plan would cap
the deficit at P40 billion or 0.5 percent of gross domestic product
(GDP), raise infrastructure spending by 20.7 percent to P147
billion, and increase social welfare allocation by 114 percent to
P10.5 billion.
GDP is total value of all goods and services
produced in the country in a year.
Mrs. Arroyo said she aims to raise the
agriculture budget by 61 percent to support government efforts to
produce enough rice within three years to be self-sufficient after
international prices spiked earlier this year.
“The rising costs of food and fuel have made
life much more difficult for our indigent countrymen. We must ease
their burden by providing them monetary support and food
assistance—relief to fill their empty stomachs,” she said in a
written message to the legislature.
“We must continue to invest in our long-term
priorities—infrastructure, education and health, among others.”
She said “we may have to postpone” the
earlier target of balancing the budget this year “given the
adverse global economic environment.”
But “if the environment turns more benign in
2009, we can try again then.”
Manila expects 2009 revenues to rise 11.4
percent from a year earlier to P1.39 trillion, supporting 97.2
percent of the proposed budget, with the balance to be covered
through borrowing.
Tax revenues should improve to 14.7 percent of
GDP next year, from 14.6 percent this year, she added.
Global slowdown
World stock markets tumbled Friday on a weak
outlook for the global economy following further disappointing US
and European data, dealers said.
Europe’s main indices were down more than 1
percent heading into midday trade, while Tokyo closed down 2.75
percent to hit the lowest level in almost six months.
Wall Street was hammered overnight as more
losses in private-sector employment weighed on market sentiment and
fears that consumption, a main pillar for US growth, is stumbling.
“Wall Street’s dive has raised concerns over
the global economy,” said President Securities analyst Steven
Huang.
Fears of a global slump also grew when the
eurozone on Thursday downgraded its growth estimate for the year.
Markets were awaiting further US jobs data
scheduled for release on Friday amid expectations that more bad news
was on the way.
“The big number for many today will be the
[US] non-farm payrolls this afternoon but expectations here are for
another disappointing number,” said CMC Markets dealer Matt
Buckland.
“Ahead of this it’s going to be a case of
the European markets adjusting to take account for [Thursday’s]
sell off across the Atlantic.”
London’s FTSE 100 index of leading shares
showed a loss of 1.33 percent nearing the halfway mark on Friday.
Frankfurt was down 1.61 percent and Paris lost 1.24 percent.
The Dow Jones Industrial Average skidded 2.99
percent on Wall Street Thursday, reaching its weakest close since
late July as the blue-chip index moved into “bear market”
territory—down 20 percent from last year’s highs.
The Nasdaq composite slid 3.2 percent and the
broad-market Standard & Poor’s 500 index dived 2.99 percent.
In Tokyo on Friday, the Nikkei had briefly
fallen more than 3 percent in early trading owing to concerns that
speculators may place big sell orders in Nikkei futures.
“Speculative selling could kick in any time in
Nikkei futures amid weak sentiment, as concerns over economic
conditions are not easing any time soon,” Akira Ishida, head of
the equities department at Chuo Securities, told Dow Jones
Newswires.
Ishida added that the cautious mood may persist,
as some investors were already starting to worry about earnings
reports from US brokerages late next week and beyond.
Hong Kong closed down 2.2 percent on Friday, and
Shanghai shed 3.29 percent.
Besides being hit by Wall Street, investors in
the Chinese market were worried that an upcoming initial public
offering by brokerage China Merchants Securities would soak up
liquidity, dealers said.
Sydney closed down 2.1 percent, Singapore fell
1.97 percent and Mumbai was off 2.79 percent.
In the United States on Friday (Manila time) a
survey by payroll firm ADP showed the loss of 33,000 private-sector
jobs in July, which heightened anxiety ahead of a government report
on monthly US payrolls for August, dealers said.
They added that selling of stocks had
accelerated as the European Central Bank cut its growth forecast for
the year to 1.4 percent from 1.8 percent. The 15-member eurozone in
the second quarter suffered its first contraction since the bloc’s
creation in 1999.
-- AFP
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