UPDATE 1-Philippines plans record infrastructure budget for 2013
* Manila proposes $9.6 billion infrastructure spending
* Gov't forecasts growth of 6 to 7 pct in 2013 (Adds quotes, background)
MANILA, July 9 (Reuters) - The Philippines plans to spend a record 404.6 billion pesos ($9.6 billion) on infrastructure next year as it aims to push its growth rate to 8 percent in subsequent years, Budget Secretary Florencio Abad said on Monday.
The Southeast Asian economy could see growth accelerate to the highest levels since democracy was restored in 1986, he said, supported by higher state spending, strong domestic demand, remittances and other factors.
Abad said it is possible growth could be 7-8 percent in 2015 and 7.5-8.5 percent in 2016.
He told reporters that the budget for next year will include infrastructure spending that's more than 19 percent above the 339.3 billion pesos allocated for it in this year's budget.
With the increased infrastructure spending, "you can imagine the impact on employment, on reducing costs of doing business as well as expanding opportunities for the private sector," Abad said.
The government does not plan new taxes in 2013, but is forecasting that its overall revenue will increase 14.1 percent from this year's level.
However, Abad said next year's allocation on infrastructure could increase if proposed reforms on cigarette and tobacco taxes are passed into law, generating more revenue.
Manila will propose to Congress a 10.5 percent increase in its spending budget to 2.01 trillion pesos ($48 billion) for 2013 against this year's 1.82 trillion pesos, Abad said.
He said the percentage of the new budget going to social services would be increased to 34.8 percent from this year's 33.8 percent.
The government wants to achieve annual growth of 7 to 8 percent within President Benigno Aquino's six-year term to make a serious dent in poverty. About one-third of the country's 94 million people are poor.
In the first quarter of 2012, the economy grew 6.4 percent year-on-year, second only to China among Asian economies, and Aquino told Reuters last week he expected the pace to accelerate in the second quarter.
Abad said the government is sticking to this year's growth target of 5 to 6 percent, despite the economy's impressive first quarter because of the uncertainties stemming from the debt crisis in Europe and slowing U.S. and Chinese economies.
Growth should rise to between 6 to 7 percent next year, followed by 6.5 to 7.5 percent in 2014, Abad said.
Ratings agencies, which have updated their views on the Philippines, have said the country must lift its long-term growth potential through higher investments if it wants to secure investment grade status.
($1 = 41.97 Philippine pesos) (Reporting by Karen Lema; Editing by Richard Borsuk)
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