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Philippines in the midst of a fiscal crisis

President Gloria Arroyo acknowledged for the first time on Monday that the Philippines was now in a "fiscal crisis", as economists warned of an Argentinian-type debt default within the next three years.

"We are already in the midst of a fiscal crisis and we have to face it squarely," Arroyo said in a written statement.

Budget Secretary Emilia Boncodin said Arroyo had ordered aides to "evaluate the proposal to declare a state of fiscal crisis".

Such a declaration would allow the president to withhold, for a limited period, the release to local government units of a portion of the 30% of taxes collected by the government that is alloted to them by law.

Aides earlier rejected Philippine comparisons with Argentina's debt woes, saying Manila was still playing down its obligations. Buenos Aires defaulted on its public debt in January 2002 amid violent street riots, reports News24.

Holding a view that the country’s financial condition would be crucial within the next two years, an economic expert in the House of Representatives yesterday said President Arroyo could prevent a full-blown fiscal crisis if she would choose "managers" who will help plug the budget deficit.

Tarlac Rep. Jesli Lapus, chairman of the House committee on ways and means, said that at this time when the country is on the verge of a financial crisis, the government no longer needs investment bankers and deal makers but managers who will directly "manage the line."

"Statistics and economic analysis are helpful but we need managers. Those who are analyzing statistics seldom are the ones asked to solve the problems," Lapus said.

Also yesterday, Ilocos Norte Rep. Imee Marcos urged Malacaсang to finally name the members of her "economic dream team" who would solve the budget deficit, which now stands at R312 billion.

Marcos noted that the business community is getting restless after Malacaсang named a number of new Cabinet members last week but remained curiously tight-lipped about the composition of the economic team, informs Manila Bulletin.

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