MANILA (Reuters) - The Philippine House of Representatives has approved 12 billion pesos (163 million pounds) in typhoon relief funds, a move that will likely widen the country's budget gap this year, officials said on Tuesday.
The House adopted a resolution late on Monday authorising the government to increase spending on relief efforts, while the Senate will begin discussing the move later on Tuesday.
Once the upper house approves the measure it will become law.
"This will necessarily increase the (2009) budget deficit," Budget Secretary Rolando Andaya told Reuters.
Two typhoons have hit the Southeast Asian country since late last month, devastating farmlands and infrastructure in the north, including the capital Manila, and killing over 650 people.
Before the typhoons, the Southeast Asian country was expected to post a record fiscal shortfall this year of 250 billion pesos, or 3.2 percent of GDP, a target which Finance Secretary Margarito Teves had said was becoming difficult to hit due to persistently weak state revenues.
Junie Cua, head of the appropriations committee in the lower chamber of Congress, said the increased expenditure could be funded by loans, grants or borrowing.
He said lawmakers were leaving it to the executive to decide on how best to finance spending on typhoon relief in order to allow more flexibility.
Teves has said the government was prepared for more foreign debt issues, via either global bonds or a yen bond issue, to fund possible extra spending this year for typhoon relief.
National Treasurer Roberto Tan said the government was expecting extra revenue of 14.4 billion pesos from its share in the sale of natural gas from the Malampaya field off western Philippines, an amount it can use for typhoon relief if its existing natural gas contracts allow it.
Also on Tuesday, President Gloria Macapagal Arroyo set up a group, including Teves and a top corporate executive, to serve as a clearing house for foreign aid for typhoon rehabilitation and prioritise projects.
(Reporting by Rosemarie Franciscoll; Editing by David Fox)
