The Philippines approved a bigger budget-deficit target for 2009, as slowing economic growth threatens to crimp tax collection and the government increases spending to counter faltering exports.

The Development Budget Coordination Committee, or the government’s economic team, agreed to let the shortfall widen to as much as 2 percent of the gross domestic product, or about P160 billion, Budget Undersecretary Laura Pascua told reporters yesterday. That compares with an earlier target of P102 billion, or 1.2 percent of the GDP.

The DBCC will formally endorse to President Gloria Macapagal Arroyo the higher budget deficit goal, along with other economic targets, on Tuesday.

The economic team maintained its forecast that the cost of Dubai crude oil will average $75 to $90 a barrel and the peso will average 45 to 48 against the US dollar this year, Pascua said.

The committee will release other economic forecasts, including exports and inflation estimates, on Feb. 25, she said.

Philippine exports plunged 40.4 percent in December from a year earlier amid a deepening global slump that’s pushed Asian economies including Japan, Singapore and Taiwan into recession. The International Monetary Fund said Feb. 18 the Philippines can afford a budget deficit of as much as 2 percent of GDP as it cut the country’s growth estimate this year to 2.25 percent.

The Philippine peso fell by the most this week in more than eight years on speculation the US, the nation’s largest export market and source of remittances, faces a prolonged recession. Bonds rose.

The peso closed at 48.30, the lowest level in two months against the dollar, from Thursday’s 47.97 after Christina Romer, an economic adviser to President Barack Obama, said the US economy may keep worsening until the third quarter of this year. Federal Reserve officials lowered their projections for the economy in 2009, with most seeing a contraction of 0.5 percent to 1.3 percent.

“There is wide expectation that dollar inflows will be lower this year,” said Antonio Espedido, a treasurer at China Banking Corp. “Our exports and remittances are going to take a hit.”

The local currency fell to its lowest since Dec. 11, according to Tullett Prebon Plc. It fell 2.4 percent for the week, the biggest drop since the week ending Oct. 27, 2000.

Philippine exports declined the most in December since Bloomberg started tracking the data in 1981. Remittances from abroad increased at the weakest pace in more than two years in December, the central bank reported this week.

Two-year bonds rose, extending gains to a second week.

The yield on the 11 percent note due January 2011 fell 13 basis points to 5.46 percent, according to the 11:15 a.m. fixing at Philippine Dealing & Exchange Corp. The price climbed 0.20, or P20 per P10,000 face amount, to 109.94. A basis point is 0.01 percentage point.