MANILA, Philippines - The country's budget deficit may hit as much as P375 billion next year, much higher than the P233.4 billion ceiling set by the government, a former finance official said.

Roberto de Ocampo, finance secretary during the term of President Fidel Ramos, said the government will have to continue pump-priming the economy next year with the lingering impact of the global economic crisis, and the devastation caused by recent typhoons.

"You are trying to revive the economy by continuing expenditures based on stimulus package. We also have to recover from the impact of the disasters this year. Government is expected to spend more than originally expected," De Ocampo said in an economic forum held at the Asian Institute of Management in Makati on Tuesday.

For this year, the government has set a target of P250 billion for the budget deficit, much higher than last year's P68.1 billion. As of October, however, the deficit already stood at P266 billion.

The Department of Finance blamed the widening deficit on tax collection shortfalls and passage of several revenue-eroding laws. These laws include the exemption of the minimum wage earners from the income tax and the reduction of the corporate income tax rate from 35 to 30%.

"The present administration is in an irreversible path of higher deficit," De Ocampo said, noting that the fiscal problem will continue in 2010, a presidential election year.

He said that the next administration must address the fiscal problem by enhancing revenue collection.

He said this could be done by curbing smuggling and corruption at the country's revenue agencies. He was against the impostion of new taxes.

"People are already heavily taxed. What the government should do is improve the current system of collecting taxes and address the corruption and smuggling," De Ocampo told reporters.

He said the government could also reduce its expenditures by trimming the bureaucracy. He said many government agencies should be rationalized to get rid of non-performing workers. This way, the government could save and provide higher salaries to deserving employees.

De Ocampo forecast the economy to grow by 1.4 to 1.6% this year and by 3 to 4% next year.