The administration of president Joseph Estrada is projecting a budget deficit of 70 billion pesos ($1.69 billion) by year-end, largely a result of an economic slowdown caused by the year-long Asian financial crisis.

Widening the appeal of Treasury bills might plug the deficit and encourage Filipinos to save more.

"The important thing is to send a psychological signal that citizens can participate, can contribute to the recovery of the country," Briones told Reuters in an interview on Sunday.

The government posted a budget deficit of 24 billion pesos by end-June.

Briones said the Filipinos' propensity not to save might prompt a nationwide campaign to attract people to invest in Treasury bills.

"It's not only to encourage investment in T-bills but to encourage savings in generalfor those who still have the capacity to save," she said.The Treasury would conduct a feasibility study this year and, if the sales plan was approved, the programme could be implemented next year Briones said.

Briones, 57, a university of the Philippines professor of public administration and vice-president of its finance department, officially takes over the Treasury on August 1.

The proposal to capture a bigger market for Treasury bills came from market players, Briones said.

"This is one good thing about a president and an administration which is popularly elected because people feel that they have to contribute to the success of his administration, to the recovery of the economy," she said.

Estrada won in May with the biggest margin of votes ever in a free presidential election in the Philippines.

Prior to the poll, Briones said she had warned Estrada of his massive budget deficit inheritance.

"It will be impossible to promise a surplus as promised to the International Monetary Fund butmeasures are already being undertaken to reduce the level of the deficit," she said.

These measures include greater efficiency in tax collection and increased discipline in spending and domestic borrowing. Briones said Estrada had clear instructions that the Department of Finance and the Treasury perform their roles in keeping interest rates down.

Treasury bill rates in the past two weeks have been falling since the Estrada administration took office on June 30.

"Efforts would be made but you have to be a fiction writer to make a promise ... but as I have said we are doing our very best," Briones said when asked if the Treasury could maintain its weekly T-bill offering at 5.5 billion pesos, despite the widening budget deficit.

She was president of the group for seven years until 1996 when the Philippines was actively pursuing debt restructuring talks with its international creditors.

"The media has been worried about that (her link with the group). Obviously, President Estrada is not worried.Members of the economic team are not worried because the positions I have undertaken have been well-studied.

They were the correct positions at those Times," Briones said.

The Philippines no longer qualifies as a severely-indebted country, she said.