MANILA: The Philippines economy grew faster than expected in the first quarter, giving the central bank scope to tighten monetary policy to tackle rising inflation, among the most pressing issues for the country’s newly-elected president.

       The Bangko Sentral ng Pilipinas will hold its next policy meeting on May 19, with some analysts seeing higher chances for an interest rate hike as soaring inflation threatens to dampen consumer sentiment and derail the economic recovery.

       The country’s gross domestic product rose 8.3% in the March quarter from a year earlier, faster than the 7.7% pace in the previous quarter, and above the 6.6% growth forecast in a Reuters poll.

       It was the fastest annual growth in three quarters, or since the June quarter of 2021 when it expanded 12.1%.

       On a seasonally adjusted basis, the economy grew 1.9% in January-March from the previous quarter, the government said yesterday.

       Consumption climbed 10.1% as the government eased Covid-19 curbs after new daily cases dropped and with election-related spending adding a further boost. Government spending rose 3.6%.

       But while the domestic economy appears to be on a solid footing, analysts say surging inflation and political risks in the Philippines could pose a problem for the economy as it recovers from the pandemic.

       “A further surge in energy prices and rising political uncertainty pose downside risks to growth,” economists at Nomura said in a note. — Reuters