MANILA - The Philippines had a budget deficit of P237.5 billion for the first 9 months of the year, only P12.5 billion shy of its full-year fiscal gap target of P250 billion.

Data from the Finance Department showed that the country's budget deficit reached P27.5 billion in September as it spent more to stimulate the local economy amid falling external demand.

The latest figure brought the country's fiscal shortfall for the third quarter to P84.1 billion, exceeding the government's P62.5-billion target for the period.

Even as it spends more for relief and rehabilitation after 2 recent typhoons, the government said it will stick to its P250-billion budget gap target for 2009, although Finance Secretary Margarito Teves has repeatedly said that meeting the target is becoming "increasingly difficult." (Read: Deficit goal difficult to achieve: Finance chief)

"We will still try to do it," Teves told reporters at the Philippine Economic Briefing last week. 

The Philippine government is heavily banking on selling government-owned assets, instead of higher tax and customs collections, to plug the budget gap.

Teves said the government is eyeing to bid out some 30 properties up for sale this year, helping them boost revenues.

On the auction bloc are the government's stakes in diversifying conglomerate San Miguel Corp. (SMC) worth P50 billion, 103 hectares of agro-industrial estate Food Terminal Inc. (FTI) worth P13 billion, and a 40% stake in Philippine National Oil Co.-Exploration Corp. (PNOC-EC).

Teves said that the worst case scenario is a fiscal shortfall of "over P300 billion" by year-end.

"Over P300 billion is the worst case scenario (for the budget deficit). If we can get SMC, it will help us maintain P50 billion," Teves told reporters at the Philippine Economic briefing in Makati City last week.

In an interview with ANC's Business Nightly, Finance Undersecretary Gil Beltran also echoed how the government is banking on the sale of the converted shares in SMC. (View: Beltran: Sale of San Miguel shares to help meet gov't budget deficit goal)

It has also sold P114.4 billion worth of domestic retail treasury bonds last month, an offer not part of its original borrowing plan this year.

Credit markets took the news in stride. Newsly issued $1 billion 25-year Philippine bond prices corrected soewhat closing today at 100.625, down from a high of 101. With a report from Reuters