A World Bank economist has expressed concern over the country's widening budget deficit on the back of dwindling revenue collection, saying the government should seriously consider measures to boost its tax take, including additional levies on petroleum.

Eric Le Borgne, senior economist at the multilateral lender, said increasing the excise tax on petroleum products is one of the vital ways to ensure that the government could finance its "ambitious" spending plan to stoke the economy this year and provide safety nets for the poor.

"It's one of the ideas that we think could be considered. If you look at the excise tax, there had been no change in revenue. It has been fixed in nominal terms and diesel was even eliminated in the RVAT (reformed value-added tax). For an oil importing country, the Philippines' excise tax on petroleum is very small, also compared to international standard," explained Le Borgne.

The economist added that reviewing the excise tax on petroleum products would also reduce the excesses associated with government subsidies.

"It has a more progressive impact on the poor," Le Borgne said.

Other options for the government would be to let the deficit balloon some more or re-prioritize expenditures by mid-year to make sure they are well-targeted.

However, he said high levels of deficit and debts could erode the country's creditworthiness.

Frontloading expenditures and the lag in tax collection have bloated the country's budget shortfall to P119.7 billion in the first quarter, already nearly two-thirds of the its revised full-year estimate of P199.2 billion or 2.5 percent of GDP.

Le Borgne said that while fiscal easing is appropriate to buffer the impact of the economic crisis on the poor, there can't be too much easing.

Le Borgne, meanwhile, sounded the alarm over the perceived resiliency of the Philippine economy, saying the country is only experiencing a delayed impact of the crisis.

He said remittances from overseas Filipino workers, which account for 10 percent of GDP and the powerhouse behind consumption, are expected to post a "significant" decrease in the coming months. This would push more Filipinos into poverty, he added.

A severe worsening of the labor market is also projected in the second half of 2009 until 2010, Le Borgne said.