Malacañang today vowed no letup in the campaign to make drastic cuts in government expenditures, even as President Gloria Macapagal-Arroyo called on government officials to comply strictly with cost-reduction measures and maximize revenue collection.

In a radio interview this morning, Cabinet Secretary and Deputy Presidential Spokesman Ricardo Saludo said the President has impressed upon her appointees and other top government officials the need to economize, curb unnecessary expenses in their operation, and help bring down the budget deficit.

He said the President has called officials of government-owned and controlled corporations (GOCCs) to a meeting on Wednesday to enlist their cooperation and compliance with the government’s austerity program.

GOCCs, particularly those suffering financial difficulties, have been under fire for saddling the government with a massive public sector deficit.

The President’s meeting with the GOCCs followed a similar conference with members of the Cabinet and other ranking government officials on the various fiscal problems, notably the budget deficit, tax collection and the country’s borrowings.

She has already ordered other government appointees to comply with cost-cutting strategies during a whole-day meeting early this month, Saludo said.

Underscoring the importance that government achieves its deficit-reduction projections, Saludo pointed out that an improvement in the country’s credit standing would lead to the reduction of the interest rates on its foreign borrowings.

A mere one percent drop in the interest rate on the country’s foreign loans will translate to P20 billion savings annually on interest payments, Saludo explained.