MANILA, Philippines - The Philippines' budget deficit fell slightly in January from a year earlier as the country's tax agencies surpassed their collection goals.

The deficit reached P37.1 billion in the first month of 2010, down 2% from last year's P38.1 billion, the Department of Finance announced Thursday.

"We are pleased to have started the year with an improved fiscal performance. We hope to sustain this in the coming months," said Finance Secretary Margarito Teves in a statement.

Data showed the government's revenue collections reached P92.3 billion in January, up 18% from P78.5 billion in the same month in 2009, while expenditures rose 4% to P129.4 billion from P116.5 billion.

Both the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), the country's two main revenue agencies, exceeded their collection goals for the month.

The BIR, accounting for two-thirds of state revenue, earned P61.68 billion in January, above its P56-billion goal, while the BOC collected P17.6 billion, above its P14.09-billion target.

In February, the two also booked higher-than-targeted collections, with the BIR raking in P48.3 billion and the BOC, P15.07 billion.

Teves said the government hopes to further bring down the deficit in the coming months by "vigorous implementation of the action plans of the BIR and BOC."

He added they are banking on additional revenues from the sale of public assets to plug the budget shortfall.

The government has set its first-quarter deficit goal at P110.94 billion, which it said it was likely to beat.

The deficit was expected to hit P293 billion, or 3.5% of gross domestic product (GDP), this year, slightly lower than the full-year 2009 budget gap of P298.5 billion or 3.9% of GDP.