The Philippine economy grew by 5.9 per cent in the second quarter, cementing the Philippines' strong position as one of the economies in Asia and the world to watch.

The second-quarter growth is slower than the 6.3 per cent in the first (revised from 6.4 per cent), but it still exceeded analysts' and even government's expectations, which averaged 5.4 per cent.

Socio-economic Planning Secretary Arsenio M. Balisacan says that the Philippine economy will continue to withstand global woes as it is buoyed by accelerated government spending on infrastructure, sustained remittances from Filipinos working abroad that fuels consumption, and consistently strong services sector boosted by tourism-related activities.

Finance Secretary Cesar Purisima said the Aquino administration is confident the economy will reach the higher end of the government's five per cent to six per cent target for 2012.

The main contributors to the overall 5.9 per cent performance from April to June were:

The services sector -- BPOs and tourism and wellness activities, including hotels and spas -- remained resilient, as it did in past quarters.

The government remains keen on the economic benefits of tourism, which is being supported by the Department of Tourism-led branding efforts under the campaign, "It's more fun in the Philippines."

National Statistical Coordination Board (NSCB) OIC Secretary General Lina V. Castro said the country's low 3.6 per cent gross domestic product (GDP) growth in 2011 (revised from 3.7 per cent) helped propped up growth in the quarter.

The government identifies several challenges to economic growth: typhoons, El Niño phenomenon, and global economic conditions such as slowdown in China's economy, the continuing euro zone problem, and higher oil prices. In addition, the government expects growth in the next few months to be driven by a low base given that the third quarter last year posted the weakest growth in 2011 at 3.2 per cent, writes Cai Ordinario for Rappler