Bangko Sentral ng Pilipinas Raises Interest Rate to 5.50 Percent
Bangko Sentral ng Pilipinas raised its key interest rate by 50 basis points to combat rising inflation and restrict monetary policy.
The Bangko Sentral ng Pilipinas raised its key interest rate by 50 basis points to 5.50 percent on October 22. This fourth consecutive increase exceeded market expectations, as economists polled by Reuters had predicted a smaller hike of 25 basis points.
The central bank stated the move is intended to make monetary policy "appropriately restrictive" and indicated it is ready to take further action if necessary. The decision follows a rise in annual inflation, which accelerated to 7.2 percent in September from 6.1 percent in August, driven by higher costs for fuel, electricity, transport, and rice.
This tightening occurs amid economic headwinds, with second-quarter growth slowing to 2.3 percent, the weakest pace since 2021, due to softer domestic demand and a slump in construction. Following the announcement, the Philippine peso strengthened to 63.311 per US dollar.
