Philippine economy surges in Q1

manila — The Philippine economy was one of Asia’s best performers in the first quarter of 2018, data showed on Thursday, but concerns over inflation pushed the central bank to lift interest rates.

The 6.8 per cent expansion, which tied it with China and was only eclipsed by Vietnam, was boosted by a surge in government spending under President Rodrigo Duterte. Philippine growth, which was 6.5 per cent at the end of 2017, has now come in at 6.5 per cent or better for 10 successive quarters.

“The Philippines remains one of the best performing economies in the region,” Economic Planning Secretary Ernesto Pernia told reporters.

“If not for the... increase in inflation, real GDP growth could have been closer to the high end of our growth target of 7.8 per cent,” he added.

As part of his “Build, Build, Build” initiative, Duterte has pushed spending to a record high. He is taking aim at bridges and public transit in a drive to unclog Manila’s notorious traffic, while also building another international airport north of the capital.

However, inflation is at a fiveyear high of 4.5 per cent and the central bank policy board took action on Thursday.

“The monetary board noted that the latest forecasts have further shifted higher, indicating that inflation pressures could become more broad-based over the policy horizon,” the central bank said in a statement. —