The Philippines, facing a record budget deficit this year, will auction P25 billion worth of retail Treasury bonds on Sept. 15, National Treasurer Roberto Tan said Thursday.

The plan for the retail bond issue was revived after months of indecision by the government as its revenues continued to slacken, with tax collection agencies unlikely to meet their targets this year.

''We have made a decision to issue retail bonds on September 15,'' Tan told Reuters.

The sales of regular Treasury bonds and bills planned for the rest of the year may be reduced based on the outcome of the retail bond sale, he said.

The Bureau of Treasury will sell 10 billion pesos each of 3- and 5-year retail bonds and 5 billion pesos of 7-year bonds.

The bond issue will be arranged by First Metro Investment Corp , BPI Capital Corp, BDO Capital, Rizal Commercial Banking Corp and the Metropolitan Bank & Trust Co.

State-run lenders Land Bank of the Philippines and Development Bank of the Philippines will also be co-arrangers.

Revenues at the government's top two collection agencies Internal Revenue and Customs bureaus fell 4.4 percent and 9.2 percent, respectively, in the first seven months of the year from a year ago due to lower tax revenues and decline in trade as the global recession weighed on the local economy.

The revenue bureau's January to July collections made up just 54 percent of its full-year target while the customs agency collected about 47 percent of its goal.

With just five more months of collections left and the delay with which a pick-up in economic growth translates into higher income tax revenues, the two agencies doubt if they can hit their full-year targets.

The Internal Revenue agency has a 2009 target of 798.5 billion pesos while the Customs bureau has a goal of 273.3 billion pesos.

Manila wants to cap its budget deficit this year at P250 billion, 3.2 percent of gross domestic product, and to bring it down to 233.4 billion pesos, or 2.8 percent of GDP, next year. (Reuters)