MANILA - The country's debt payments are likely to rise by 6.3% next year as the government incurs more financial obligations to plug its ballooning budget deficit, the Finance Department said.

According to Finance Undersecretary Gil Beltran, Philippine debt payments are expected to reach P746.2 billion in 2010 from the programmed P702 billion this year.

Beltran said payments for maturing principal obligations would grow 3.6% to P405.4 billion, while interest payments would go up by 9.5% to P340 billion.

The country's debt stock, on the other hand, is seen to increase to P4.723 trillion or 56.3% of gross domestic product (GDP) next year as the government retained a higher budget gap ceiling this year.

"It is expected to increase because we are pump-priming the economy and because of higher deficit. But it's not forever," Beltran said.

This year, the Philippines is staring at a record fiscal shortfall of P250 billion or 3.2% of GDP, driven mainly by weak tax collection and the P330-billion stimulus package.

By 2010, the government is expecting this to go down to P233.4 billion or 2.8% of GDP. This as the country's economic growth is seen to recover to a range of 2.6% and 3.6% from this year's targeted 0.8% to 1.8%.