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By Karl Lester M. Yap Aug. 27 (Bloomberg) — Philippine economic growth accelerated in the second quarter from the slowest pace in a decade, supporting the central bank’s decision last week to end interest-rate cuts. Gross domestic product increased 1.5 percent from a year earlier, the National Statistical Coordination Board said in Manila today. That compares with the 0.5 percent median forecast of 17 economists surveyed by Bloomberg News. The economy expanded 0.4 percent in the first quarter, the government said in May, the weakest pace since a recession ended in 1998. President Gloria Arroyo has increased spending and widened the 2009 budget deficit target to a record to shield the economy from the worst global slump since the Great Depression. The central bank kept its benchmark interest rate unchanged at a record low of 4 percent last week after slashing borrowing costs by 2 percentage points from mid-December to July. The government’s “stimulus programs have been successful in preventing a slowdown,” said Jonathan Ravelas , a market strategist at Banco de Oro Unibank Inc. in Manila. “They should continue to pump prime to create the necessary conditions for sustainable economic growth.” SM Investments Corp. , whose assets include the Philippines’ biggest bank and largest shopping mall operator, said profit rose 16 percent in the second quarter as people spent more at its supermarkets and department stores. The “worst is over” for the country’s retailers and the industry will grow moderately this year, the Manila Times cited Philippine Retailers Association Chairman Jorge Mendiola as saying Aug. 14. Avoid Recession The Philippine government predicts expansion in the $167 billion economy will improve in the second half of the year as the global slowdown eases and state spending kicks in, helping the nation avoid a recession this year. “We expect positive growth for the whole year,” Economic Planning Secretary Augusto Santos said yesterday. “The crisis appears to have bottomed in the second quarter and we expect a rebound in the third quarter.” The decline in Philippine exports narrowed to the least in seven months in June as the region showed signs of recovery. China’s growth accelerated in the second quarter for the first time in more than two years after the government implemented a 4 trillion-yuan ($585 billion) stimulus plan and prodded banks to lend more. Singapore last month raised its 2009 economic forecast, predicting the economy will shrink 4 percent to 6 percent this year, less than earlier estimates. To contact the reporter on this story: Karl Lester M. Yap in Manila at kyap5@bloomberg.net ;