Jan-Aug deficit just a fourth of 2012 goal
MANILA (UPDATE) - The Philippines posted a budget surplus of P2.523 billion ($60 million) in August, after three straight months of deficits, giving the government more room to step up spending in the last quarter and help cushion the economy from the global slowdown.
Last month's budget surplus brought the government's shortfall in January to August to 71.208 billion pesos, just a quarter of its full-year deficit target of 279 billion pesos, or 2.6 percent of gross domestic product (GDP).
"The fiscal authorities clearly have a lot more space to boost the economy with more outlays. We think they can be more aggressive with spending," said Jun Neri, economist at Bank of the Philippine Islands.
Government revenues in August reached 129.408 billion pesos, up 4.2 percent over last year, while spending rose 10.4 percent to P126.885 billion, official data showed on Wednesday.
"It is also encouraging to see that the growth of expenditures, despite the surplus, is exceeding significantly the growth of the economy and that revenues continue to outpace nominal GDP growth," Neri said.
The Bureau of Internal Revenue, which accounts for two-thirds of total revenue, collected 96.756 billion pesos in August, up 10 percent from a year earlier but 7-percent lower than its goal for the month.
The Philippines, one of Asia's most active issuers of foreign debt in the overseas markets, hopes to win its first investment grade rating before President Benigno Aquino steps down from office in 2016.
Analysts expect the ratings upgrade may come in the next six to 18 months, lowering the country's borrowing costs.
In July, Standard & Poor's Ratings Services raised its credit rating on the Philippines to one notch below investment grade, citing improved fiscal flexibility and strong external position.
Fitch Ratings affirmed in June its stable outlook on the Philippines as it kept the country's credit rating at a notch below investment grade.
Moody's revised in May its outlook on the Philippines to positive, but kept its ratings at two rungs below investment grade.
The country's economic managers remain optimistic economic growth this year will be within the target of 5 to 6 percent, accelerating from last year's 3.7-percent expansion, despite a sharper-than-expected slowdown in the second quarter.
Manila hopes to narrow its deficit to 2.0 percent in 2013 until 2016 when Aquino's term ends.
(Reporting by Erik dela Cruz and Manuel Mogato)