MANILA - Global investment bank Goldman Sachs believes that the Philippines can still balance its budget by 2013 even as the country's deficit already hit P266.1 billion during the first 10 months of the year, above full-year target.

"Although the fiscal deficit has breached the government's earlier target, we remain confident in its medium-term consolidation plan to balance the budget by 2013, given our positive view on the growth outlook," Goldman Sachs said in a recent report.

However, the investment bank said the country must exercise "greater fiscal discipline and effort to broaden the tax base and cut expenditure" to attain this.

The government recorded a budget deficit of P28.5 billion in October, more than 3 times the P9 billion deficit it incurred in the same month last year.

This pushed the 10-month budget gap to P266.1 billion or P16.1 billion above the programmed ceiling of P250 billion for 2009.

Goldman Sachs said this was already expected given the government's need to spend on reconstruction costs following the back-to-back typhoons that hit the country. Goldman Sachs had projected a P306-billion deficit for the Philippines.

With the 10-month deficit at P266.1 billion, the government said the 2009 deficit would most likely come in at P280 billion.

The government is banking on the sale of state-owned assets, particularly its sequestered shares in diversified conglomerate San Miguel Corp., to rein in the deficit. But without the sale, it said the "worst-case" deficit scenario would be P300 billion.

Aside from the San Miguel shares, the government is looking to sell its 40% stake in Philippine National Oil Co., and a portion of the 120-hectare Food Terminals Inc. property in Taguig City.