MANILA - The Philippines dodged recession in the second quarter to become one of few Asian economies to withstand the deepest global slump in decades, thanks to strong inflows of remittances and increased state spending, a Reuters poll shows.

Seven out of 12 economists forecast the economy grew by a seasonally adjusted 2.0% in the second quarter, a reversal of the previous quarter's contraction of 2.3%.

On an annual basis, growth likely picked up to 0.6% in the second quarter, from 0.4% in the first quarter, the poll showed.

One of the economists surveyed, Development Bank of Singapore (DBS), believes that the Philippine economy registered a modest growth in the three months to June.

"We think the economy likely averted a contraction in the second quarter, with our estimates pointing to a seasonally adjusted growth of 1.4%," said DBS.

The Singapore-based investment bank noted that the rebound in consumer spending fueled the growth.

"[This] will to a large extent reflect a release of pent up demand," it said.

The economic planning agency said last week the economy likely bottomed out in the first half and should post stronger growth later this year when election-related spending starts and consumers shop ahead of the Christmas holidays.

Analysts said the data is unlikely to alter views policy rates will remain on hold at a record low for the rest of the year, with the central bank focusing on the economy's performance in the second half of 2009 to gauge the strength of the recovery. -abs-cbnNEWS.com, With Reuters