El Nino looms over Philippine growth

Manila

THE Philippine economy has outpaced most of its Asian neighbours in the last two years, but its large rural sector may drag on growth in the second half as it confronts what forecasters say will be one of the worst El Nino dry spells on record.

South-east Asia's fifth-largest economy is looking more vulnerable as recent months of crop losses from weak rainfall take a toll on farm output and commodity exports. Failed harvests will hit farm wages and crimp consumer spending - the main driver of GDP - and threaten to kindle inflation.