Kuala Lumpur (VNA) – The Philippines became Southeast Asia’s fastest-growingeconomy last year, with expansion driven by consumption, services andinvestment.

Its gross domestic product (GDP)expanded 5.6%, surpassing the median 5.5% growth seen in a survey ofeconomists. Stocks extended their gains to more than 1% after the data. Thepeso held its loss, with the currency slipping 0.1% against the US dollar.

While the annual paceof expansion is slower than the government’s 6-7% target, it is the fastestpace in the region so far.

National Economic andDevelopment Authority Secretary Arsenio Balisacan told reporters on January 31 thatthe government is confident that the economy will expand at a pace of 6.5-7.5% in 2024 – which will help the Philippines retain the region’s top growthtag.

That echoes theoptimism of President Ferdinand Marcos Jr about the consumption-driveneconomy’s prospects, as inflation cools and the central bank halts one of theregion’s most aggressive interest-rate tightening campaigns.

Still, sustaining thestellar performance requires heavy lifting by the government, given monetarypolicymakers are unlikely to pivot to easing anytime soon amid lingering pricerisks.

While governmentspending declined 1.8% in line with fiscal consolidation efforts, Balisacansaid he expected services expansion to continue pacing the economy’s growthtrajectory.

Even as consumptionhas remained resilient, a sluggish global economy, elevated inflation andinterest rates stand in the way of a significant improvement in growthprospects this year, said Robert Dan Roces, chief economist at Security Bank inManila.

The growth momentumnow falls on government spending, he said./.