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By * Reuters
Published: Thursday July 31 2008
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MANILA, July 31 (Reuters) - The Philippine economy likely grew around 5.7 percent in the April-to-June quarter from a year earlier, outpacing a 5.2 percent expansion in the first quarter, mainly due to a robust services sector, a senior government official said on Thursday.
Consumption, which makes up about 70 percent of the economy, defied rising inflation with support from continued strong flows of remittances from Filipinos working overseas, Augusto Santos, deputy director general at the state economic planning office, told Reuters.
"It's the same range, 5.3 to 5.9 percent, but it's more likely at 5.7 percent, based on initial data," Santos said, referring to estimates for the rise in gross domestic product in the second quarter compared with the year-earlier quarter.
"The growth comes from services," he said. "Consumption is still high, it's driven by remittances that come in."
The government will announce economic growth data for the second quarter on August 28.
Healthy revenues from the growing outsourcing industry would power growth in the services sector, Santos said.
Growth in the outsourcing sector, particularly call centres, has been driven by foreign companies seeking lower operating costs and relocating their back office operations to the Philippines.
Overseas Filipino workers' remittances, equivalent to about a tenth of GDP, stayed above $1.4 billion per month from March to May and hit a record high of $1.43 billion in May.
Remittances were $6.8 billion in the first five months of the year, up 14.7 percent.
The central bank, which expects total remittances sent through formal channels this year to reach about $15.7 billion from $14.45 billion in 2007, has said the money would help sustain economic growth and support the country's balance of payments.
(Reporting by Rosemarie Francisco; editing by Neil Fullick)
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