Philippine debt yields were steady in quiet trade on Monday ahead of the release of the government's January-February budget data and dealers said an uptick in yields was likely if the figure came above estimates.

The government's budget data will be released at 0530 GMT and could move markets if the shortfall indicated that the full-year
deficit goal may be overshot, they said.

"There will be pressure for yields to go up if the deficit for the first two months of the year comes in at P60 billion ($1.25 billion), and a 10 to 15 basis points rise in yields is likely if the figure is higher," a trader from a local bank said.

The government aims to keep the budget shortfall below 110 billion pesos in the first three months of the year, a government
source said, based on the revised budget deficit target of P177.2 billion for the full 2009 year.

"It is important that the market sees where the government stands in terms of the budget deficit so we will have more
conviction in our trades," a second dealer from a local bank said.

"Officials have been harping about the need to increase spending to avert a sharp slowdown and they would have to fund that spending by issuing more securities."

Manila has raised its domestic borrowing programme for the year by P55.5 billion to P442.04 billion from an original plan of P386.55 billion to finance a wider budget gap.

It aims to borrow P104.5 billion from the domestic debt market in the second quarter, after raising P60.45 billion in the first three months of the year, based on Reuter's calculations of Treasury auction awards.

It plans to sell P8.5 billion worth of 3-year Treasury bonds at a regular auction on Tuesday.

Transactions in the secondary debt market were about P1.65 billion by late morning on Monday against trades of at
least P2.78 billion in all of Friday.