The Philippines has no current plans to borrow from international debt markets in the second half of the year to fund the government's budget deficit, a senior government official said on Monday.

"There is no plan as of now to issue bonds in the international capital market this second semester," National Treasurer Roberto Tan told Reuters.

He was referring to comments by a central bank official who said at the weekend that a sovereign issue of $500 million-$1 billion was being planned for the fourth quarter. The official spoke on condition of anonymity.

The Southeast Asian country, which relies heavily on local and foreign debt issues to bridge its fiscal gap, raised $1.5 billion in a sovereign debt issue in January to cover for its commercial funding needs in 2009.

Plans to return to the overseas debt market had not been completely ruled out, but the government prefers to source cheap funding from multilateral development lenders and the domestic debt market, Tan said.

"It is an option available to the government and (we) will consider this if there is compelling advantage against sourcing from domestic market."

"As reiterated several times, we will be biased for ODAs (official development assistance) and domestic borrowing for new funding needs," Tan said.

Finance Secretary Margarito Teves said last week the government may consider raising its 2009 budget deficit target for the third time to bridge a widening shortfall between spending and tax revenues during the economic downturn.

The deficit in the first four months of the year has reached 111.8 billion pesos ($2.4 million), more than half the current full-year target of 199.2 billion pesos, as revenues failed to keep pace with higher spending.

Teves said on Monday the government has been doing its part to lift economic growth by accelerating spending.

"The government remains committed to increased and more effective public spending to help stimulate economy," he said in a statement sent to reporters.

"The government needs the support and cooperation of Congress and private sector and our citizens to enable the domestic economy to continue growing amid the global crisis."

The Philippine economy shrank in the first quarter at its fastest rate in two decades, and the government said it may slip into recession this year if leading economic indicators continue to fall.