The visiting team of the International Monetary Fund concluded its week-long review of the Philippine economy with an upward adjustment to the country's growth path to 1.5 percent this year and 3.5 percent in 2010.
The IMF earlier forecast the country's gross domestic product (GDP) to grow by just one percent in 2009 and 3.2 percent in 2010.
"The economic recovery in the Philippines is gaining momentum. Following the initial dip, growth rebounded sharply in the second quarter led by resilient remittances and timely policy stimulus," IMF mission leader Il Houng Lee said in Wednesday's press briefing.
Lee also said they have given up hope of convincing the government to limit this year's budgetary shortfall as the actual 10-month deficit already breached the full year goal of 250 billion pesos (5.32 billion U.S. dollars).
"It's a done deal already. But we proposed that next year's deficit should be limited to within 290 billion pesos (6.17 billion U.S. dollars) or 3.5 percent of GDP.
He said the latest fiscal data threaten sustainability over the near and medium term.
"The proliferation of incentives, removal of documentary stamp taxes and the successive typhoons will further reduce the tax effort next year," Lee said.
The mission also recommends that the government should maintain civil service wage costs and public investments at existing levels and to enact new measures to boost revenues.
For the fund and for the markets to shed their continuing apprehension, Lee said it was "important for government to present a credible medium-term consolidation program."
Such a plan already exists where the nation's budget should finally achieve a balance by 2013.