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Saudi Arabia says it can slash its budget deficit in 2026 after a year in which spending and bond issuance soared to fund huge infrastructure projects. Wall Street isn’t convinced.While the Saudi government sees the fiscal shortfall at 3.3% of gross domestic product for next year, analysts at Goldman Sachs Group Inc and Bank of America Corp estimate the figure will be far higher.Goldman predicts the gap coming in at 6%, even wider than this year’s projected figure of 5.3%. The result, according to the bank’s analysts, will be a further $25bn of international borrowing, which would be a record for the kingdom in terms of annual issuance. Bank of America forecasts a deficit of about 5% in 2026.**media[392464]**The government, which published its latest spending plans last week, said revenue should recover next year, helped by a robust non-oil economy. In addition, production of oil — still the source of around 60% of government earnings — is set to be higher after increases agreed to by Opec+.With spending, Saudi Arabia has cut back or delayed some of its economic transformation projects, including parts of the new city of Neom, to avoid overheating the economy.Foreign analysts, however, think the kingdom will struggle to reduce its deficit given that Brent crude is down to around $63 a barrel. Bloomberg Economics estimates Saudi Arabia needs a price of almost $100 to balance its budget.Saudi Arabia has sold around $20bn in dollar- and euro-denominated bonds on international markets this year. That excludes deals from the likes of the sovereign wealth fund and oil giant Aramco.Finance Minister Mohammed al-Jadaan, speaking last week, emphasised the government would prefer to bridge its fiscal gap by borrowing instead of running down reserves. In its favour, its debt levels amount to around 30% of GDP, lower than most other sovereigns.He added that the government will be “very careful to not oversupply the market.”Razan Nasser, a sovereign analyst at T Rowe Price, which manages roughly $1.8tn of assets, says the market can absorb the kingdom’s levels of issuance for now.“Harder questions may need to be asked in the medium term as they use up that space, but we are not there yet,” she said.Still, to minimise the impact on borrowing costs, the government is likely to diversify its funding sources and may look at syndicated loans and tapping investors in Asia, according to Jean-Michel Saliba of Bank of America.“Large and persistent issuance of Saudi Arabia external debt could weaken investor appetite and impact borrowing costs,” said Saliba, who estimates the Saudi Arabia will sell $18bn of Eurobonds next year. 

An alliance of 30 influential Philippine business and civic organisations is demanding an independent investigation into what it describes as "excessive corruption" linked to government infrastructure projects.The call for action comes after President Ferdinand Marcos Jr disclosed last month the results of an internal audit into flood control projects, revealing troubling patterns of irregularity.Key findings showed that out of 545bn pesos ($9.63bn) in flood control spending since 2022, thousands of projects were either substandard, poorly documented, or non-existent.Some carried identical costs despite being in different locations, and only 15 out of more than 2,000 accredited contractors cornered 20% of the total budget.The allegations have spurred legislative inquiries in both chambers of Congress, and Marcos has said he will create an independent commission to investigate "these nefarious activities."The alliance expressed "outrage, disgust and disappointment" over the "shameful, unabated, continuing and excessive acts of graft and corruption" by many officials in Congress, the executive department and local government units."While we take note of the President admonishing the corrupt in government, we are concerned that the guilty among these officials will continue their merry way of robbing the people and filling their pockets," the groups said in a statement.They described the acts as a betrayal of public trust and a "treasonous" offence against Filipinos.There was no immediate comment from the offices of the president, the house speaker and senate president.The controversy has already led to the resignation of the public works secretary. His successor, Vince Dizon, has suspended all bidding for locally funded flood control projects, ordered courtesy resignations of all public works officials, and vowed to permanently blacklist contractors involved in fraudulent projects.The Philippine scandal unfolds as neighbouring Indonesia grapples with its own wave of public outrage. In recent weeks, mass protests have erupted across 32 provinces in Indonesia, many turning violent, with regional parliaments set ablaze.While Indonesia's streets have filled with demonstrators, the Philippine response has so far remained largely online, with citizens resorting to naming and shaming on social media. Some activist groups have begun mobilising on the ground, and others are calling on the public to take to the streets.