The Philippines has replaced Indonesia as the growth engine in Southeast Asia, international credit rating agency Standard & Poor's (S&P) said in its latest research report.

S&P projects Philippine GDP to expand by almost 7 percent this year, and then moderate to 6 percent-6.5 percent in 2014 and 2015, which is in line with the target of 6-7 percent set by the Filipino government.

The country’s rise was attributed to the drastic growth in domestic market and lowest level dependence to export in comparison with other economies in the region.

The ASEAN economies are more domestically focused and therefore tend to do better when global growth is sluggish, S&P said.

Indonesia, Malaysia, the Philippines and Thailand are expected to see growth rates of around 5.5 percent this year, higher than the 5.3 percent level forecast for the Asia-Pacific region.-VNA