MANILA - The Philippines' former defence chief, running for president in May polls for the ruling party, promised on Wednesday to increase infrastructure and social services spending and improve tax collections to raise the country's competitiveness. 

Gilberto "Gibo" Teodoro, a 45-year-old Harvard-educated lawyer, said if elected he would likely adopt the current administration's fiscal management policies, keeping the current rate of consumption taxes, and may even borrow more when needed to finance a ballooning budget deficit. 

He also said he was in favour of pushing the government's target for achieving a balanced budget to 2014 from 2013. 

"You'll have to improve your tax collection efficiency," Teodoro told Reuters in an interview at an upscale Manila restaurant, adding his government would court the private sector in his first 100 days in office for joint ventures in upgrading public infrastructure. 

"There's no choice right now," Teodoro said when asked if he would continue the current government's fiscal policies. "Given the shortfalls, it is realistic to presume that consumption taxes will stay." 

Teodoro, a three-time congressman belonging to the powerful Cojuangco political clan, said he could not promise not to impose additional or new taxes but favours simplifying the system and lower rates to expand the tax base. 

"I would certainly want some lowering of rates but it has to be well studied and well phased in because there will be revenue shortfall once you introduce it. And you'll only reap the benefits if there is additional velocity in terms of business transactions to cover that shortfall," he said. 

His cousin, Senator Benigno "Noynoy" Aquino III and current frontrunner in opinion surveys, said last week he would not impose new taxes or raise tax rates if elected president.

Balanced budget

The Philippines, failing to raise revenues as it spends more to pump prime the economy, faces a record budget deficit for the second year in a row this year. 

"I am targeting a balanced budget by 2014 because this year is still unpredictable whether there will be trickle down to us from the global economic uptrend," Teodoro said. 

Teodoro, an air force colonel in the reserves who flies C-130 Hercules transporters, said his government may resort to more borrowings to fund its budget deficit. The government is looking to borrow around $15 billion from local and foreign sources, up from $14 billion in 2009. 

"If the credit market is favourable, why not?," Teodoro said. "Sometimes debt is better than taxation, if there is an adequate prospect of repayment. It's really treasury management." 

Low popularity

Teodoro said corruption in government can only be minimised, not eradicated, through a carrot-and-stick approach. The Philippines ranks among the lowest in the region in corruption, according to Transparency International. 

He shrugged off criticism about his low popularity, relying on the country's largest political party to push his ratings up once the campaign period begins next month. He currently ranks fourth in opinion surveys, with a rating of 5 percent against Aquino's 45 percent. 

"I'm not worried about my ratings because I see positive developments and I see a lot of people supporting me," he said, adding he doesn't see his association with the unpopular President Gloria Macapagal Arroyo as a burden. 

"The electorate is slowly getting the picture that I have my own ideas, my own capabilities and the next six years it will be me and not anybody else."