Economic growth in the first quarter is expected to decelerate and fail to match the 7.1-percent expansion in the same period last year because of the drag expected from a slowdown in the US economy.

This is the view of the National Economic and Development Authority (NEDA), which said the local economy was still seen to post a decent growth in the quarter, but not as robust as that of the previous year.

The Philippine economy ?will not likely reach a 7-percent growth,? NEDA Director General Augusto Santos told reporters Wednesday following the release of the 2006 Poverty Statistics Report. ?But the growth will not be below 6 percent.?

Santos said the slowdown in the economies of Philippine trading partners spelled the difference between the gross domestic product (GDP) growth in the first quarter of 2007 and its likely performance in January to March this year. GDP, a common measure of an economy, is the value of goods produced and services rendered within an economy in a given period.

The United States is not only the Philippines? biggest source of imports, but is also the biggest foreign market for Philippine exports. Last year, the United States accounted for about 17 percent of the Philippines? total export earnings.

Besides the United States? problem on its trade and budget deficit, the subprime market crisis is also weighing down on the world?s biggest economy.

Santos said the slow recovery of Japan, the Philippines? second biggest trading partner, was also adversely affecting the local economy. Japan accounts for more than 10 percent of Philippine exports and imports.

But the NEDA expressed optimism that the effects of a slowdown in the United States and slow recovery of Japan was something the Philippine economy could bear.

For the entire year, the government has set an economic growth target of between 6.3 and 7 percent. Santos said this already took into account effects of a weakening external trade because of the US and Japan factors.

The figure marks a slowdown from last year?s, but the NEDA said it was still decent.

Earlier, Santos said the expected growth drivers for this year would be higher government spending and sustained increase in remittances from overseas Filipino workers. Remittances have, in turn, boosted consumer spending.

However, he said that rising crude oil prices were another challenge confronting the domestic economy this year.

Last year, the Philippine economy registered a gross domestic product growth of 7.3 percent, the strongest in 31 years. This prompted economic managers to declare that the Philippines was no longer a laggard in Asia as it posted a more decent growth than many of its neighbors.

The government credited higher investments in the business process outsourcing and mining sectors, increase in government spending and growth in household expenditures as the major reasons for the record growth. Michelle V. Remo