Manila aims to keep its budget shortfall at 82 billion pesos in the third quarter and 65.7 billion pesos in the last three months of the year.

It wants to lower the deficit to 3 percent of GDP this year and cut it further to 2.6 percent in 2012 and to 2.0 percent by 2013, keeping it at that level until 2016 when President Benigno Aquino III's term ends.

The main tax agency, the Bureau of Internal Revenue, which delivers around two-thirds of state revenue, collected 73.79 billion pesos in July, more than 1 percent below target. That brought collections in the seven months to July to 531.79 billion pesos, 0.6 percent below its goal.

The Philippines, one of Asia's largest sovereign issuer of foreign currency debt, is waiting for markets to stabilise before launching a planned sale of as much as $3 billion in global peso bonds and US dollar bonds to retire costly debt and finance its remaining borrowing needs this year.

Last month, Standard & Poor's reaffirmed its sovereign rating for the Philippines, saying the country's fiscal weakness was balanced by its improving growth prospects and strong external liquidity.

Fitch upgraded Manila to one notch short of investment grade last month, a week after Moody's Investors Service raised its rating to align with S&P.

In its planned 2012 budget, Manila is aiming to cut its total sovereign debt sales by 4.6 percent from 2011, with foreign debt to be slashed by nearly a third.

Copyright Reuters, 2011