Philippine economy beats forecasts in third quarter

MANILA, Nov 09 (AFP): The Philippines' economy grew faster than expected in the third quarter, official data showed Thursday, but the government warned inflation remained a "major challenge".

The 5.9 per cent on-year expansion was well up from the 4.3 per cent in the previous three months and was far better than the 4.7 per cent predicted in a Bloomberg survey.

A sharp pick up in government spending was a key driver in the latest bump, the Philippine Statistics Authority data showed.

However, elevated inflation and a string of interest rate hikes-the central bank has lifted rates 450 basis points since May 2022 -- weighed on growth in household spending, which slowed for a second straight quarter, to five per cent.

"Inflation is still a major challenge," Economic Planning Secretary Arsenio Balisacan told reporters, adding that October's slowdown in prices to 4.9 per cent was still above the government's 2-4 per cent target.