[MANILA] The Philippines ran a 86.4 billion pesos (S$7.44 billion) budget suplus in the first five months of 2015, more than ten times higher than a year ago, the Department of Finance said on Monday, hurting chances of faster second quarter economic growth.
Having targeted a deficit of 284 billion pesos for 2015, the government is under pressure to accelerate spending after growth weakened to a six-year low in the first quarter from the previous three months.
The latest data showed the government ran a 67.3 billion pesos surplus in May as a result of higher revenues and spending 26 per cent less than targeted.
While the government spent nine per cent more in May compared to last year, and nearly 12 per cent more than April, it missed its 237.1 billion pesos spending program for the month. "For growth, it means we will need to see June kicking in at stronger pace, otherwise we will continue to be disappointed with the output number owing to mobilisation of resources still moving at timid pace," said Emilio Neri, economist at Bank of the Philippines Islands in Manila.
"At least, the spending numbers are picking up a bit compared with the first four months of the year. It is a welcome improvement. We would have wanted to see a double digit growth number to compensate for the January to April underspending." .
Budget Secretary Florencio Abad said last week he expected spending to improve in the second quarter, though he could not say to what extent or whether the increase would be enough to help cushion the impact of tumbling exports.
Economic officials have admitted meeting the top end of the country's 7-8 per cent growth would be a challenge.