MANILA -- The Philippines' economic growth for the third quarter slowed to 6.1% on the year, as rising inflation and interest rate hikes discouraged households from spending, the government said on Thursday.

Gross domestic product in the quarter was the slowest in three years and brought down growth for the first nine months to 6.3%. The reading falls below the government's revised 6.5% to 6.9% target. The economy now needs to grow by at least 7% for the rest of the year to reach the low end of the goal.

Interest rates and inflation are at their highest in nearly a decade, and consumer spending, the Philippines' main growth driver, continued its decline for a third straight quarter and hit its lowest level in four years.

Socioeconomic Planning Secretary Ernesto Pernia said the slowdown in household spending is a concern. "With high prices, the demand tends to be dampened," he said. "Food prices remain to be elevated."

"We are not exactly exuberant about the 6.1% growth rate, but we are comfortable that we remain one of the fastest growing in Asia," Pernia added. The Philippine economy, Pernia said, would have grown by at least 6.5% to 7% had inflation been kept at bay. Hitting the government's target, he said, will be "challenging" for the remainder of the year.

The Bangko Sentral ng Pilipinas, the central bank, has hiked interest rates to their highest level in a decade to anchor inflation expectations and bring consumer prices back to target levels by next year. Inflation this year is expected to breach the central bank's range of 2% to 4%.

Government spending continued to pick up, growing 14.3%, up from 7.6% for the same quarter last year, as President Rodrigo Duterte's ambitious infrastructure program continued to gain pace. Public spending contributed nearly a 10th to overall growth numbers.

Investments, on the other hand, contributed a quarter to overall GDP and grew 16.7% on the year.

On the supply side, services grew 6.9% on the year, contributing nearly half of total output. Agriculture, on the other hand, contracted 0.4% due to typhoons and a highly regulated commodities trading environment, Pernia said.

Going forward, Pernia expects household consumption to rebound during the current quarter as Filipinos go on Christmas spending sprees.

Pernia said the government is watchful of external risks amid ongoing trade tensions between China and the United States and the tightening global debt market.