MANILA, Philippines - Standard & Poor's Ratings Services (S&P) raised its growth forecast for the Philippines this year, in a vote of confidence for its strong domestic economy.  

S&P said the Philippines gross domestic product is expected to grow 4.9% this year. This is higher than its previous estimate of 4.3%.

In the first half of 2012, the Philippines' economy was the third best performing economy with 6.1% GDP, after China and Indonesia. 

However, S&P lowered its best-case forecasts for 2012 real GDP growth by about half a percentage point for China to 7.5%; Japan to 2%; South Korea to 2.%% and Singapore to 2.1%. 

"Naturally, any worsening of the economic conditions in the Eurozone will increase contagion risk for Asia Pacific, given the region's - particularly the open economies' - sensitivity to capital flows and trade," said Andrew Palmer, S&P credit analyst. 

The Philippine government is targeting a growth rate of 5 to 6% for 2012.

Earlier, Socioeconomic Secretary Arsenio Balisacan said the economy is likely to grow 6% this year.

"With the healthy macroeconomic fundamentals, buoyed business expectations and improved global competitiveness, the Philippines' GDP is expected to meet the target growth of 5 to 6 percent. We will most likely hit the upper end of the range this year," he said.