[MANILA] The Philippines economy grew 6.8 per cent in the first quarter from a year earlier, matching expectations and supporting optimism the government is on track to meet its full-year target.

However, Economic Planning Secretary Ernesto Pernia said on Thursday the economy would have grown faster were it not for inflation that hit a five-year peak in April because of higher fuel prices and tax reforms that began this year.

Gross domestic product growth "would have been probably approaching the mid range" of the government's 7-8 per cent target for this year, he said.

Economists polled by Reuters had predicted that gross domestic product would grow 6.8 per cent in the January-March period, after expanding 6.5 per cent the previous quarter.

"Inflation is a spoiler. We need to really focus on inflation," Pernia told a media briefing. He said meeting the lower end of the government's full-year growth goal could still be achieved.

The Philippines economy has shown sustained growth for nearly two decades aided by exports and domestic demand, and the government intends to further boost growth via aggressive infrastructure spending.

The Philippines' solid growth, among the fastest in Asia, will be fuelled by more government spending in the medium term.

President Rodrigo Duterte's administration is rolling out a US$180 billion "Build Build Build" programme, which aims to modernise the public transport system to make it more efficient.

The government has implemented tax reforms, including additional taxes on some commodities, to boost revenues that will support infrastructure spending, while reassuring the public the tax measures will have a minimal and temporary effect on inflation.

Solid economic growth is expected to spur the central bank to raise rates at its policy meeting on Thursday to bear down on inflation, economists say.

Such an increase in the central bank policy rate would be the first hike in more than three years.

REUTERS