The government is set to collect on a 10 percent expanded value-added tax (VAT) from Tuesday after a political battle between Arroyo and her opponents that reached the Supreme Court.

Manila maintains the extra tax revenue would help it avoid possible default on its mounting debts.

World Bank country manager Joachim von Amsberg urged Manila to resist pressure to delay the second stage of the VAT law to be implemented next year, when Arroyo has the option to raise the rate to 12 percent.

Arroyo, who survived an impeachment complaint in September for alleged election fraud, has been under pressure to ease the burden of higher pump prices and electricity rates arising from historically high oil prices.

Some allies have urged her to defer VAT collections on the two sectors for the time being.

"All of the measures that have been put in place, plus more, are quite desperately needed to bring financial health back to the Philippine state," von Amsberg told a news conference.

"A very large effort is needed. Every element that has been passed I think should be vigorously implemented to attain those targets," he said.