MANILA, Aug 7: The Philippines' budget deficit for the first seven months of the year declined to 13.57 billion pesos (323 million dollars) from 24 billion pesos (571 million dollars) a month earlier, the government said Friday, reports AP.

The government hopes to limit the budget deficit to 40 billion pesos (952 million dollars) by the end of the year. It says, however, the deficit could balloon to 70 billion pesos (1.7 billion dollars) unless spending is cut and revenue collection is improved.

Strong revenue collections in July were largely responsible for the narrowing of the trade deficit.

Government revenue totaled 53 billion pesos (1.3 billion dollars) in July, while expenditures reached only 43 billion pesos (1.0 billion dollars). It was the first time since February that the government has posted a surplus on a monthly basis.

For the first seven months, revenues totalled 272.0 billion pesos (6.5 billion dollars) while expenditures reached 285.6 billion pesos (6.8 billion dollars). 1 A slowing of economic activity because of the Asian financial crisis has reduced corporate profits and therefore tax payments, while a drop in imports has lowered customs collections.