MANILA -- The Philippines' budget deficit has narrowed sharply from government targets amid improved revenue collections, President Gloria Arroyo said yesterday after ringing the opening bell at the stock exchange.

Arroyo has pledged to balance the budget by 2010 after she rushed tax reform through Congress last year and introduced a value added tax which was expanding to 12 percent from 10 percent in January.

As a result the government's fiscal position has improved and Arroyo said the budget deficit had reached P15.4 billion in January, compared with a targeted ceiling of P20.9 billion.

The figure compared with P16.5 billion in the same period last year.

The treasury bureau added that revenue collection for January reached P72.6 billion, up from P64.3 billion the previous year The Budget deficit in 2005 reached P146.5 billion, lower than the target of 180 billion targeted for the year.*AFP

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