NUSA DUA, Indonesia - The Philippines is working to secure a $500 million loan from multilateral agencies to cover an increase in its budget deficit, Finance Secretary Margarito Teves said on Tuesday.

He told Reuters that plans to tap international capital markets via a sovereign bond issue had not been shelved, but that the program loan looked more attractive, if it could be arranged.

"These are more concessional and if they are quick disbursing, I guess other things being equal, it would be prudent to tap this additional loan rather than go to the market," Teves said on the sidelines of the Asian Development Bank's annual meeting in Indonesia.

The loan is likely to come from the ADB and a combination of other multilateral agencies, he said.

"We are still working on this additional support, or program loans. It is important that we have a clear signal that this additional support will be available. Our target is that this could be available around the end of the third quarter.

"But if the (debt) market becomes very, very attractive, of course it could be a combination."

The Philippines, reeling from low tax collections and the need to shield the economy from the global slowdown, has twice revised its budget deficit upward this year.

"We started with P177 billion ($3.69 billion), now it's almost P200 billion," Teves said. "So the $500 million will probably account for that."

Asked if budget deficit target was safe from another revision, Teves said: "Hopefully, but we have to work hard."

The government had earlier targeted about $2 billion in official development assistance this year. It had also raised $1.5 billion in a global sovereign issue in January.

It also plans privatisations worth about P30 billion this year, including two big-ticket items by the end of September, including the sale of a 40 percent stake in oil and gas explorer PNOC Exploration Corp.

Teves said multilaterals had more money as a result of the Group of 20 nations pushing for budgetary support globally.

"It is increasingly favorable for these multilaterals to provide more liqudity and support. So we have to weigh this additional and new opportunity with what is available in the commercial market."