UPDATE 3-Philippines to reassess balanced budget goal

(Adds Moody's comments in paragraphs 10, 11, 18 and 19)

By Karen Lema

MANILA, April 29 (Reuters) - The president of the Philippines signalled the end of a long-held goal of balancing the budget this year because of the cost of shielding the economy from a U.S. slowdown and soaring rice prices.

Gloria Macapagal Arroyo, a former economist, had made ending a decade of government deficits the centrepiece of her economic platform.

But keeping spending down will be difficult when U.S. weakness is threatening economic growth and when the world's biggest rice importer is seeing its import bill for the staple balloon.

"At this point in time we are still working on a balanced budget," Arroyo told reporters in the central city of Cebu. "I keep on saying that we have to reassess it."

On the revenue side, which last year was bolstered by record privatisation proceeds, a likely slowdown in consumer spending amid rising prices and a failure to tackle evasion and corruption will hamper growth in tax collections.

Investors took Arroyo's climbdown in their stride with the peso PHP= quoted at 42.14 against the dollar, barely changed from Monday's close, and the main stock index .PSI up 0.54 percent.

"They are lucky on one count that the market's risk appetite at the moment is favourable," said Claudio Piron, head of Asian foreign exchange strategy at JPMorgan.