The officials attributed the increase partly to increased spending intended to jump-start the economy in order to sustain growth in the face of the worldwide financial crisis.

Government expenditure rose to 101.6 billion pesos in Oct 2008, a 19.2 per cent increase over the same month in 2007 while revenue hit 92.6 billion pesos in Oct, a 9.6 per cent increase over the same period last year.

For the 10 months to Oct, the deficit widened to 62.3 billion pesos compared with 41.5 billion pesos a year earlier.

Finance Undersecretary Gil Beltran told Dow Jones newswires the government was confident the increase in infrastructure spending would allow the government to hit its economic growth targets.

'Every one percent hike in capital outlay increases gross domestic product (GDP) by 0.65 percentage points,' said Mr Beltran. 'The accelerated spending this year hopefully would be enough to meet the GDP target this year.'

The government has already cut the 2008 GDP growth target to as low as 4.1 per cent from a previous target of 5.5-6.4 per cent due to the impact of the financial turmoil on the local economy.

'The national government will continue to improve revenue collection even as we accelerate spending to keep the budget deficit within the 75-billion-peso ceiling this year,' Finance Undersecretary Jeremias Paul said. -- AFP