Government officials are confident economic growth can be sustained at 6.7 percent for the whole year after the second quarter’s impressive growth of 7.5 percent.

Finance secretary Margarito Teves said robust growth would enable the government to meet its P1.12-trillion revenue target and cap the budget gap at P63 billion.

Bangko Sentral ng Pilipinas governor Amando Tetangco Jr. said the growth is in harmony with its neutral policy stance.

"This is a strong indication that we’re on the right track towards a sustainable and meaningful economic growth that is felt by the majority of our people," Teves said.

The government officials are not as wary as analysts who are fretting over the impact of the drought and the US subprime credit crisis on growth.

The two agreed that growth will come from robust agricultural output, services and industrial growth, and higher spending.

"The growth rate in the second quarter gives us more confidence that the economy will grow within the full-year target of 6.1-6.7 percent," Tetangco said.

"The BSP kept its key rate unchanged in its August 23 meeting, citing the muted risks to prices, both from supply and demand, as well as expectation of a strong peso.

Inflation stood at 2.6 percent in the first seven months, at the low end of the 2.6-3.1 percent forecast range for this year. A neutral stance is neither promoting or curbing growth.

The government posted a P1.6-billion surplus in July, helping narrow the cumulative deficit through July to P39.4 billion from P41 billion in the first half.

Revenues in the first seven months reached P614 billion, half the revenue target for the year.

"The strong GDP should help us in our efforts to increase revenues and meet our targets for the remainder of 2007," Teves said.

The services sector continue to be the primary driver of growth as it generated the biggest contribution to last quarter’s GDP.

Remittances from overseas workers helped the country’s Gross National Product to post an 8 percent growth from the previous quarter.

Teves said that with strong growth it will follow that revenues will improve.

Arroyo yesterday also gave a verbal order to Trade Secretary Peter Favila to "cut more red tape as well as the drag of power costs on our exporters and manufacturers."