The Philippine economy will remain among Asia's strongest in the fourth quarter despite a possible higher interest rate because of strong consumer demand for certain products and services and more employed Filipinos, the chief economist of Rizal Commercial Banking Corporation said Saturday.

"This growth forecast is still among the fastest in the region because our economy is doing well," RCBC's Michael Ricafort said.

The World Bank recently downgraded this year's Philippine economic growth to 5.6 percent from 6 percent due to inflation risks, apart from lower government spending and weaker demand for exports.

However, it is still higher than China's 5.1 percent, Indonesia's 4.9 percent, and Malaysia's 4.3 percent growth forecast.

Ricafort said the Bangko Sentral ng Pilipinas (BSP) might raise its policy rate this year to slow inflation to 4 percent by year-end after it accelerated again to 6.1 percent last month.

"The BSP is working to bring down prices of goods and services. As an unintended consequence, the economy could slow down. Borrowing costs for business owners also increase and consumer demand weakens," he said.

Ricafort said global oil prices have started falling which could discourage the central bank from raising its rate drastically.

"Global oil prices have declined to $82 to $83 per barrel from a peak of $95 per barrel last month or since the war between oil-rich countries Russia and Ukraine began," the economist said.

He also expected a downtrend in rice prices starting this month as he said local farmers have begun collecting fresh harvests.

"Inflation quickened last month mainly from higher prices of rice which accounted for nearly 9 percent of the inflation basket and grew 17 percent year-on-year," Ricafort said.

While a higher interest rate aims to slow consumption, Ricafort said the continued flow of remittances from overseas Filipino workers, or at least 3 percent growth yearly will still support substantial levels of consumer spending, especially during the Christmas season.

"That is more than $40 billion a year. That's the fourth largest in the world after India, China and Mexico," the economist said.

He added more Filipinos or 800,000 could earn from business process outsourcing or BPO this year as the industry's revenue could rise from $32.5 billion to $59 billion based on data from the Contact Center Association of the Philippines.

Another growth area is tourism, which Ricafort said saw 4 million foreign visitors last month, nearing the 4.8 million full-year target of the government.

He added higher productivity among Filipinos is also expected as the country's unemployment rate declined to 4.4 percent in August from 4.8 percent in July, based on data from the Philippine Statistics Authority.

Moving forward, Ricafort said the government must improve science and technology education for higher quality jobs and increase spending on infrastructure amid the full reopening of most economies.

"We are now fully reopened. Students are also back in schools which encourages putting up food businesses. Labor market in the US also improved which will affect export trade," he said.

Ricafort added the government could continue distributing financial and other assistance to farmers to control inflation. He believed the inflation rate will approach 3 percent next year, close to the ideal 2 percent for healthier economic growth.