MANILA (Reuters) - The Philippine economy is likely to grow 5.3 to 5.9 percent in the second quarter from a year earlier, picking up from the first quarter due to higher farm output and a recovery in consumer spending, a senior official said on Monday.

“Agriculture is rebounding,” Economic Planning chief Augusto Santos told Reuters, adding that an official economic growth projection would be released in early July.
“The economy is getting used a little bit to high prices and, therefore, production and consumption is resuming.”
Rocketing inflation, spluttering growth in the United States and the soaring cost of importing oil dragged annual growth in the first quarter down to 5.2 percent, well below expectations and down sharply from the previous quarter’s 6.4 percent.
Inflation hit a nine-year high of 9.6 percent in May and is expected to go higher as the rise in fuel costs show no let-up.
Finance Secretary Margarito Teves said on Monday that this meant interest rates were likely to go up.
Speaking to Reuters at a finance ministers’ meeting in South Korea, he refused to comment on how much monetary policy might need to be tightened and said the central needed to be mindful of the impact on the real economy.
“They (the central bank) have more information than we have. But I will make sure they are able to interact with the real sector as well,” Teves said.
Santos’s upbeat comments about consumer spending jar with more pessimistic forecasts from companies relying on private consumption.
Last week Philippine Long Distance Telephone Co., the country’s largest telecoms group, said inflation would crimp its revenue in the second half of the year.
Analysts said annual growth in the second quarter would probably be at the low end of Santos’s range.
“I think the 5.9 percent higher-end range is probably a bit optimistic,” Barclay’s Capital economist Nick Bibby said, adding that he expected annual growth of between 5.3 and 5.6 percent.
“Until the latter part of the second quarter the problem with inflation had not fed through, so I am thinking the third and fourth quarter is where it is going to be more problematic.”
--------------------Import pressure
Last month, the government cut its full-year economic growth target to 5.7-6.5 percent from 6.3-7.0 percent.
Underlining the economic pressures exerted by rising import costs and investors’ reluctance to keep pouring money into the Philippines, the central bank on Monday cut its forecast for this year’s balance of payments surplus to $2.5 billion from $3.4 billion.
“While lower, it’s still a decent surplus, given the challenging environment,” Governor Amando Tetangco said in a mobile text message.
In May, the balance of payments surplus shrank to $42 million from a surfeit of $499 million in April, leaving the surplus for the first five months of the year at $2.2 billion.
The Southeast Asian country had a balance of payments surplus of $8.6 billion last year due to record remittances from millions of Filipinos working overseas, export growth and heightened investor interest in local stocks.
The equity market .PSI, which gained 21 percent in 2007, is down around 28 percent so far this year. On Monday, the index finished up 2.58 percent.
The peso was quoted at 44.42 against the dollar, little changed from Friday’s close at 44.41.
The currency is down nearly 7 percent against the dollar this year. In 2007 it rose 19 percent, helping the Philippines digest rising import costs.