MANILA, May 16 : The Philippines' target of 7% to 9% gross domestic product (GDP) growth this year is "doable" despite external risks, its economic planning minister said on Monday.

"The bulk of the growth is going to come from domestic demand and we have to ensure a strong domestic rebound," Economic Planning Secretary Karl Kendrick Chua told ANC news channel, days after reporting a better-than-expected 8.3% GDP growth in the first quarter.

Meanwhile, Philippine stocks closed 1.9% higher to record their best session in two months on Monday (May 16).

That follows five straight sessions of losses and a 5.6% decline last week.

Data released last Thursday showed the Philippine economy grew at a better-than-expected 8.3% in the first quarter, increasing the likelihood of a rate hike to tackle inflation as early as the next central bank meeting on May 19.

The South-East Asian nation's economy grew a better-than-expected 8.3% in the first quarter, the government said on Thursday. It was the fastest annual growth since the June quarter of 2021 and exceeded a 6.6% forecast in a Reuters poll.

On a seasonally adjusted basis, the economy grew 1.9% in January-March from the previous quarter, with the easing of Covid-19 curbs and election-related spending underpinning domestic demand.

The Philippines thus was the fastest growing economy in the East Asia Region for the period, officials said.

That gives the Bangko Sentral ng Pilipinas (BSP) scope to raise interest rates to tackle rising inflation, which threatens to dampen consumer sentiment and derail the economic recovery.

"The BSP stands ready to adjust our monetary policy settings, should we see material risk of these supply-side pressures spilling over to the demand side," BSP Governor Benjamin Diokno said following the data release.

The BSP holds its next policy meeting on May 19, with some analysts seeing higher chances for an interest rate hike as early as its May 19 meeting.

"With GDP now back to pre-Covid levels and with inflation accelerating, we fully expect BSP to hike policy rates at the May 19 meeting," said ING senior economist Nicholas Mapa.

 - Reuters