One of the three international credit rating firms has maintained its stable outlook for the Philippines despite the increase in the projected budget deficit this year to P297.2 billion.

Andrew Colquhoun, Asia-Pacific Sovereigns head at Fitch Ratings, said Friday that the rating of the Philippines remains 'BB' with stable outlook, citing the revision in the deficit target brings the government nearer “our own projection for 2010 of around P320 billion.”

This year, Fitch predicts that the country's deficit will be 4 percent of the country's gross domestic product, excluding asset sales.

“A government decision to save rather than spend excess revenues would clearly benefit the public finances in the short term. However, the Philippines has pressing infrastructure and investment needs,” Colquhoun, said in an e-mailed reply to questions from Manila Bulletin.

“The more pressing rating weakness in the Philippines is the low government revenue take,” he added.

Acting Budget Secretary Joaquin Lagonera, said Thursday that the government raised its 2010 budget to P1.62 trillion from the previous program of P1.58 trillion to finance spending for post-typhoons reconstruction and rehabilitation.

Along with higher budget, Lagonera said the government also expects that revenues, including proceeds from the sale and lease of state assets, will increase to P1.32 trillion from the previous P1.28 trillion.

With the increase in this year's national budget, the incoming Aquino-administration may decide to raise the proposed P1.68 trillion spending for 2011.

President-elect Benigno Aquino, who takes over from Gloria Arroyo this month, has pledged to cut poverty in a nation where the World Bank estimates one in every four people live on less than $1.25 a day.

Finance Secretary Margarito B. Teves, earlier said budget shortfall this year will reach P297.2 billion, which is just a slightly lower compared with the record P298.5 billion last year.

In January to May, the country's budget deficit widened to P162.1 billion, exceeding the first-half target of P145.2 billion.