By MAX ESTAYO

Finance secretary Margarito Teves said yesterday the government will speed up spending in the first six months of the year to sustain economic growth.

Teves however clarified it is not a stimulus program similar to what the US government is doing because what will be spent will be from existing budget allocations.

"For the meantime, we will live within the budget but do one thing on an increasing tempo – frontload or spend more in the first six months," Teves said.

"We can also tap GOCCs and GFIs so that we can increase the level of spending in the event the slowdown in the US has a larger impact or if it takes longer than expected," he said.

The US government has prepared a $150 billion fiscal stimulus program, which includes giving rebates to taxpayers to keep consumption afloat in the midst of an escalating subprime mortgage crisis.

Locally, Albay Gov. Joey Salceda has proposed a similar package, although at a lower scale of P75 billion, in case the economy suffers from an extended decline in the US economy, the country’s major trading partner and primary source of remittances.

Teves said the proposal has been discussed at the economic managers’ meetings but nothing has been decided yet.

If, indeed, the stimulus packaged is adopted, which may come in the way of a supplemental budget, the government will direct the funds for public works, transportation and communication sectors, Teves said.

From government financial institutions such as Land Bank of the Philippines and Development Bank of the Philippines, Teves said the government may permit local government units to borrow from said banks for their infrastructure spending.

The loans may be used to fund construction of roads, irrigation and school buildings, Teves said.

The government has a goal to end its 10-year fiscal deficit this year and is wary of additional spending, which may bloat the budget.

However, Teves said the weakening of the US economy will have adverse effects on the domestic economy and the government is prepared to cushion the impact, especially on the most vulnerable sectors.

Congress last month approved the P1.236-trillion budget for the year, although Malacanang is yet to receive the final version.

Budget undersecretary Laura Pascua said Malacañang is expecting to get the copy within the week then after finalization with the President, the budget may be implemented by March.

The government accelerated spending in December, allotting an extra P12 billion for infrastructure and social services to support the economy.

Credit-rating agencies have applauded the reforms in the fiscal sector, which allowed the government to increase spending for infrastructure and basic services that would attract foreign investments.

However, after the Moody’s upgrade in the country’s rating outlook to positive from stable last month, Teves said it remains to be seen whether other debt raters will follow and accord a favorable outlook that would make government debts less costly.

Last year, even with the record privatization proceeds, expenditure was around P37 billion pesos less than projected.

In December alone, the Philippines had a deficit of P22 billion, far above its goal of a P7.8 billion gap.

The government has already started to sell off assets to meet this year’s fiscal target. Last month, it raised P8.9 billion from a 10 percent stake in Manila Electric Corp.