The Philippines may have to increase its budget deficit target this year, Finance Secretary Margarito Teves said Monday.

"We might have to," he told reporters when asked if slowing growth could lead to an adjustment in the country's budget gap ceiling.

Last week, Teves said the country is sticking to its 2009 budget deficit target of P199.2 billion or 2.5 percent of gross domestic product.

But today, he said revisions will have to be addressed "in relation to other factors that are available" such as the country's inflation rate, which hit a 16-month low in April at 4.8 percent.

The Philippines incurred a budget shortfall of P119.2 billion for the first three months of the year, already two-thirds of the government's revised full-year estimate.

The P7.9-billion fiscal surfeit in April brought the deficit for the first four months of the year to P111.8 billion, four times more than the P25.8-billion budget gap in the same period last year.

Earlier, Socioeconomic Planning Secretary Ralph Recto said the economy likely grew between 1.8 percent and 2.8 percent in the first quarter after GDP grew 4.5 percent in the fourth quarter of last year.

He said the agricultural sector may have expanded from 1.5 percent to 2.1 percent in January to March 2009. Industry and services, meanwhile, may have grown by 0.1 to 1.5 percent and 3 to 4 percent, respectively.

For the full year, Rector said the government remains confident of hitting its target of 3.1 to 4.1 percent. "We are confident of these numbers," he noted, adding that second-quarter growth will be better than the forecast for the first three months due to easing inflation. With Reuters