MANILA, Philippines - (2nd UPDATE) The government posted a budget deficit of P34.6 billion in June as collections fell short of targets, bringing its six-month fiscal shortfall to P196.7 billion, the Department of Finance said on Wednesday.

The June deficit brought the six-month budgetary shortfall to P196.7 billion, already exceeding the government estimate of P178.5 billion, with the government unable to sell big-ticket state assets worth some P30 billion.

In June, revenue generated by the country's main collection agencies, the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) totaled P92.1 billion. From January to June, revenue stood at P592.1 billion.

The BIR, which accounts for about two-thirds of state revenue, collected P59.37 billion in June, which is 5% below the target of P62.7 billion.

At a briefing in Malacanang, BIR Commissioner Kim Henares said the agency raised its first half collection goal to P860 billion from P830 billion, resulting in a deficit of P17.5 billion for the period.

She said that the BIR will focus on three things to improve collection efforts. These are strengthening enforcement activities by filing tax evasion charges, simplifying and making compliance costs lower, and instituting internal reforms "to make sure that every centavo goes to the national treasury."

President Benigno Aquino III's economic team has raised this year's budget deficit goal to P325 billion, or 3.9% of GDP, from P300 billion or 3.6% of GDP.

Finance Secretary Cesar Purisima said previously the goal is to cut the fiscal deficit to 2% of GDP in the next 3 years.

The government has maintained this year's growth target of 5 to 6%, and substantially raised 2011's goal to 7 to 8%, saying the country needed to play catch-up with its faster-growing neighbors.

Analysts expect Manila to post a deficit this year of around P308 billion, according to a Reuters poll in May. The forecasts ranged from P293.2 billion to as much as P362 billion.

The Southeast Asian economy, Asia's largest sovereign issuer of foreign currency bonds, wants to increase the amount of local currency debt in its borrowing plan to better manage its debt load.

Manila plans to raise at least P20 billion from the sale of retail treasury bonds in the current quarter to refinance maturing debt. - with a report from Reuters