Inflation remains a challenge economic planning minister
Turnaround in government spending key growth driver
Higher interest rates to be a drag analyst

MANILA, Nov 9 Reuters The Philippine economy rebounded strongly in the third quarter, supported by a recovery in government spending, but higher interest rates and weak global growth could make it difficult to sustain the momentum.

Gross domestic product GDP grew by 5.9 in the September quarter from last year, surpassing the 4.7 forecast in a Reuters poll, helped by a turnaround in government spending offsetting a slowdown in household consumption.

Like many countries, the Philippines has been grappling with soaring inflation that has dampened demand and has forced the central bank to aggressively raise interest rates at the expense of growth.

But the economic planning secretary, Arsenio Balisacan, was optimistic about the growth outlook, saying a 67 growth target set by the government was still doable and within reach.

To reach the lower end of the goal, Balisacan said the economy would have to grow 7.2 in the last quarter, which he said was not impossible as long as the government sustained robust spending and inflation stays on a downtrend trend.

Balisacan said inflation remained a challenge as it dampened household consumption, which grew at a slower pace of 5.0 in the July to September period, the weakest in two years, from 5.5 in the second quarter.

But government spending in the third quarter grew 6.7,…