MANILA, Philippines — The Philippine economy is likely to grow faster than expected in 2009 because easing inflation aids a recovery in consumption and the government spends more on infrastructure, government officials said Thursday.

Inflation, as measured by the rise in the consumer price index, was 11.2 percent in October, slowing down from 11.8 percent in September and a 17-year-high 12.5 percent in August.

"With lower inflation, there is a possibility we might upgrade next year," Economic Planning Secretary Ralph Recto told reporters when asked about the 2009 growth target.

A Reuters source in government said the government would likely raise its target for next year's growth in the gross domestic product to 4.6-5.5 percent from 4.1-5.1 percent.

The Cabinet-level Development Budget Coordination Committee (DBCC), an inter-agency body in charge of setting the economic and fiscal targets, will meet next week.

The source said the DBCC would likely set 2009 export growth target at 3.0-5.0 percent and the import growth target at 6.0-8.0 percent, and keep the inflation target at 6.0-8.0 percent.

The government plans to increase its capital outlay—spending that is mostly geared to infrastructure—by 20 percent in 2009, which will also help lift growth, said Finance Undersecretary Gil Beltran.

This year, economic growth is expected to slow to 4.4-4.9 percent after reaching a 31-year high of 7.2 percent in 2007, Recto said last month.

He said part of the reason was easing demand for the country's electronics exports and as business activity slows with the impact of the worst financial crisis in decades. Edited by INQUIRER.net