The Aquino administration plans to lower the government's budget deficit to P298.6 billion next year from a record P325 billion this year, the Department of Budget and Management said.

Budget Secretary Florencio B. Abad, said next year's financial gap will be equivalent to 3.3 percent of gross domestic product (GDP), a reduction of six basis-points compared with 3.9 percent of the economy this year.

Abad said the government plans to raise revenues next year to P1.46 trillion, which is aimed at enabling the state to reduce the budget deficit even as it increases spending to boost growth.

He said spending on public works, salaries and debt payments may total P1.757 trillion, or 14 percent higher than the 2010 budget of P1.54 trillion.

President Aquino, who took office on June 30, plans to accelerate growth to as much as 8 percent in 2011.

The deficit in the first six months of the year was P196.7 billion, exceeding the previous government’s estimate for a gap of P178.5 billion.

In June alone, the government posted a P34.6 billion deficit, or 14 percent higher compared with P30.2 billion in the same period last year.

Mr. Aquino is currently going after tax evaders and corrupt officials to boost state revenue without raising taxes in his efforts to contain the budget gap. His government this month widened the 2010 deficit target to a record P325 billion to sustain the economy’s recovery from last year’s global slump.

The government's main-tax agency Bureau of Internal Revenue (BIR) reported that it collected P59.37 billion in June this year, short by 5 percent or P3.3 billion compared with P62.67 billion target.

Collections in the first six-months was short by 4 percent or P17.5 billion at P403.5 billion against the P421 billion target for the period.

The BIR was originally tasked to collect P830.4 billion this year, but the economic managers raised the target to P860.4 billion.