r* Productive Expenditures and lnterest Payments 1,. 1,. 1,, 7991 1998 1999 2000 2007 2002 2003 2004 2005 2006 2007 2008 "a-Productive Expenditures -+lnterest Payments There was a recovery in productive expenditures in 2006-2009 as interest payments eased and the government attempted to offset the adverse impact of the global financial crisis. Noninterest spending fell again in the last two years despite lower interest payments and a slight improvement in total revenue. The downward adjustment in productive expenditures since the Asian Crisis and which accelerated in the period 2003-2006 took a big toll on investments in public infrastructure, expenditures for economic services, and expenditures for social service. (Diokno, 2008) lnterest payments as a percentage of GDP went down from a peak of 5.3% in 2005 to 2.9o/" in 2011. ,Ml*i&diry;_-ta*iM *3@ Deficit Figure 3 presents trends in the total and primary balances of the national government. The total balance is the difference between total revenue and total expenditures, while the primary balance is the difference between total revenue and productive or non-interest expenditures. ln the conventional view, the primary balance measures the ability of the government to reduce the public debt stock or keep it at a non-increasing level. 4