MANILA, May 28 (Reuters) - The Philippine economy shrank a seasonally adjusted 2.3 percent in the first quarter, its weakest performance in two decades and a steeper fall than expected, underlining expectations the central bank will cut rates again.

The contraction was the first in eight years and a senior government official said the economy could slip into recession this year.

The central bank is expected to cut its key overnight borrowing rate later on Thursday by 25 basis points to 4.25 percent and some analysts say it may cut again at its next meeting.