MANILA - The country's public sector deficit is likely to decline next year as the economy starts to recover from the global crisis, an official said Wednesday.

According to Finance Undersecretary Gil Beltran, the government's consolidated public sector fiscal position would post a lower deficit of P210.2 billion or 2.25% of gross domestic product (GDP) from this year's P233.9 billion or 3% of GDP.

"The deficit will be scaled down to P210.2 billion in 2010 as the economy moves to a higher growth rate and the impact of the global financial meltdown dissipates," Beltran said.

The Philippines posted a 1.5% GDP growth for the 3 months ending June, an improvement from the 0.6% recorded in the previous quarter. This has led the country's economic managers to consider raising the 2009 full-year growth target, which is currently at a range of 0.8% to 1.8%.

The government aims to trim the country's 2010 budget deficit to P233.4 billion or 2.8% of GDP as it moves towards fiscal consolidation. This year, the Philippines is looking at a fiscal shortfall of P250 billion or 3.2% of GDP.

Beltran said deficits incurred by government-owned and controlled corporations will likely reach P61.9 billion next year from P63.6 billion. However, he said surpluses of local government units may decline to P28.7 billion from P31.3 billion.

"The deficits of the national government and the 14 corporations will be trimmed down, while the surpluses of social security institutions and government financial institutions will move up," he said.

Surpluses of social security institutions led by the Government Service Insurance System, Social Security System, and the Philippine Health Insurance Corp. are seen to rise by 25% to P51.4 billion from P41.1 billion.

On the other hand, surpluses from government financial institutions led by the Land Bank of the Philippines and the Development Bank of the Philippines are likely to inch up by 14% to P8 billion from P7 billion.