[MANILA] The Philippines posted its fourth monthly budget surplus this year in November as government spending remained tepid, a bad sign for an economy that slowed dramatically in the third quarter in the absence of fiscal stimulus.
Official data on Monday showed a November surplus of 6.8 billion pesos (S$201 million), compared with a surplus of 1 billion pesos for the same month last year.
Expenditures contracted 8 per cent, outpacing a 4 per cent drop in revenue, which could mean weak economic activity in the last quarter of the year.
The latest monthly surplus narrowed this year's cumulative budget deficit as of end-November to 26.8 billion pesos, just a tenth of the programmed ceiling of 266 billion pesos for the whole of 2014, or 2.0 per cent of gross domestic product.
State spending has slowed for most of 2014 after a 145 billion pesos economic stimulus fund the Aquino government created from budget savings was questioned in the courts. In July, the Supreme Court ruled the fund was partly illegal.
Cabinet officials have said the court ruling had a chilling effect on the bureaucracy, with projects scrutinised more closely now. "In the past, when we were doing above 7 pct (GDP) growth, government spending was growing at double-digit pace year on year," said economist Victor Abola of the University of Asia and the Pacific in Manila. "That means, it (fourth-quarter growth) might follow a similar pattern as Q3, which is a big disappointment," he said.
Economic Planning Secretary Arsenio Balisacan said earlier this month he remained hopeful the economy would grow 6 to 7 per cent this year, downplaying the impact of a recent typhoon and restrained government spending.
Still-robust consumer spending could help the economy bounce back in the last quarter, he said, after growth slowed in the third quarter to its weakest pace in more than five years partly due to a decline in public spending.
The government had targeted GDP growth of 6.5 to 7.5 per cent for this year.
Finance Secretary Cesar Purisima said in a statement the growth in state revenues allows the government room to spend more on social services and infrastructure.