By Karen Lema

MANILA (Reuters) - Mateo Ragonjan took a leap of faith in August last year.

The executive sous-chef of a seven-star luxury hotel in Abu Dhabi packed his bags to take up a similar job back home in the Philippines.

He is one of a small group of like-minded Filipinos returning to jobs back home, a sign of confidence in an economy that for decades has seen millions leave in search of better prospects overseas.

Ragonjan now helps run a 300-man kitchen that caters to guests and high-rollers flocking to Manila's newest and most luxurious casino resort, one of 400 overseas Filipinos who came home to work at the hotel.

"The Philippines is booming at the moment, so I thought it was the right time to go back," Ragonjan, 41, said on a break from his 10-hour shift at the Solaire Resort & Casino in Manila Bay, developed at a cost of $1.2 billion.

The Philippines economy is leaving behind its reputation as a regional laggard. Last week, it reported annual GDP growth of 7.8 percent in the first three months of the year, outstripping China to make it Asia's fastest-growing economy.

Earlier this year, the government secured an investment grade credit rating, reducing its borrowing costs, while the stock market has reached a series of record highs this year.

Returnees like Ragonjan are just a trickle compared to those still leaving the country, but the hope is that the more the country can draw the diaspora back to the Philippines the more that the entrepreneurial spirit that prompted them to leave in the first place can add fuel to the economy.

Nearly two million Filipinos left last year to take on jobs such as seafarers, maids, laborers, hotel staff, and medical workers, forming one of the world's largest diasporas of nearly 10 million migrants, about a tenth of the population.

The returnees are limited for now to a few sectors, including entertainment, tourism and information technology, but some hope that it marks the start of a stronger flow.

"I am seeing the trend happening," said venture capitalist Francisco Sandejas, who as head of the Brain Gain Network, an online platform connecting professional Filipinos overseas to develop business ideas in the Philippines, has been campaigning for more job creation at home for two decades.

"I am just seeing that now it is much easier to convince people to come home, it was never easy and it is still not easy... people are very optimistic about the next three years," he added, referring to the remainder of President Benigno Aquino's six-year term.

Still, Aquino faces an uphill task to overturn criticism he is presiding over a jobless economic boom.

The economy is unable to create enough jobs for around a million new job seekers each year. A quarter of the labor force is unemployed or underemployed and the government is struggling to reduce poverty.

TRICKLE DOWN?

Solaire is the first of four new casino-resorts to open in Entertainment City, a 10-hectare development near Manila Bay that is at the forefront of the government's push to boost tourism and investment.

Ragonjan said part of his decision to return to the Philippines was because there seemed to be more opportunity than in the past. He says his base salary in Manila is higher than it was in Abu Dhabi, but in returning home he has also given up some financial grants that went with his job in the Gulf.

"If the Philippines continues to grow like this, it can help a lot of Filipinos here. It is good to be back," he said.

The Philippines' call centre industry, the world's biggest, continues to grow strongly and the country is also home to small but expanding software and information-technology firms. The country's business process outsourcing industry is expected to employ 1.3 million people by 2016, up from 640,000 in 2011.

Earl Valencia, a former business incubation manager at Cisco Systems in California, came home with his family two years ago to help co-found a business incubator and accelerator company in Manila to support start-ups and tech entrepreneurs.

"There were a lot of things to anchor me in the United States, but there were also a lot of economic attractions in this part of the world," said the 30-year old.

To turn the trickle of returnees into a flood, officials acknowledge the economic boom needs to be more broad-based.

Some skeptics say the boom is mostly benefitting the country's entrenched elite, with little trickling down to alleviate a poverty rate that has remained stubbornly high near 30 percent, far from the 17 percent Aquino hopes to achieve by the time is he due to leave office in 2016.

Per capita GDP was 6.1 percent greater in the first quarter than a year earlier, the highest in at least two years. But official unemployment remained stubbornly high at 7.1 percent as of January, the highest in Southeast Asia.

"Growth is not resulting in the creation of more jobs because the growing sectors are not really labor intensive," said former budget secretary Benjamin Diokno.

"We really need to revive manufacturing. We can do more."

In one promising sign, manufacturing grew in the first quarter by 9.7 percent over a year earlier despite sluggish export demand. Capital formation, a measure of investment, jumped 48 percent as the private sector expanded capacity to meet domestic demand, which is partly fuelled by funds sent home by overseas Filipinos.

DAUNTING

While Aquino has had success in plugging holes in the national budget and imposing revenue reforms, his government still faces a daunting task to fix infrastructure bottlenecks and investment constraints that hinder broader-based growth.

Economic Planning Secretary Arsenio Balisacan acknowledged that while real GDP per person has risen 11 percent over the last two years, the gains have not been evenly spread.

"Inclusive growth is not about averages, but about the lower part of the income distribution," Balisacan told reporters after the GDP data.

He said the solution is to link the poor to growth sectors in the economy, such as manufacturing and agriculture.

In the latest World Competitiveness Report by the Swiss-based Institute for Management Development, the Philippines moved up five places to 43 out of 60 economies, overtaking Indonesia and India.

While it showed improvements in economic performance, and government and business efficiency measures, the gains were not accompanied by job generation. It was down seven places in employment, one notch down in overall productivity and two rungs down in labor productivity.

Still, in Manila's bustling new casino, freshly returned workers, or overseas Filipino workers (OFWs) as they are known, believe the time is ripe for the decades-long exodus to reverse.

"I believe it is really time for our country, our economy to get a slice of the cake that companies abroad are enjoying at the expense of our hard working OFWs," said Rosario Chavez, a gaming manager at Solaire, who spent three decades abroad.

"I really hope that our government will open more opportunities here, more reasons for our OFWs to come home."

(Editing by Rosemarie Francisco, Stuart Grudgings and Neil Fullick)