The numbers support this story. The Philippine economy grew at the highest GDP growth rate of 7.3 percent in three decades in 2007. This growth rate was above the Government’s target of 6.1-6.7 percent set for 2007. This was boosted by the expansion of services and the impressive performance of both agriculture and industry.
On the demand side, growth was driven by government consumption and investments. This strong growth was achieved in a period of benign inflation. Headline inflation last year stood at 2.8 percent, the lowest in 20 years. This is now comparable to developed economies. In turn, low inflation has resulted in lower interest rates, again the lowest in 21 years.