MANILA — The Philippine central bank on Thursday raised its benchmark interest rates by 75 basis points in a surprise off-cycle move, and signaled its readiness to take further policy action to contain broadening inflationary pressures, its governor said.
That brings the key overnight borrowing rate PHCBIR=ECI to 3.25% effective Thursday, Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla said in an announcement via Facebook.
The move came ahead of the BSP’s regular policy meeting scheduled for Aug. 18, and follows two back-to-back rate hikes of 25 basis points each in May and June.
“In raising the policy interest rate anew, the Monetary Board recognized that a significant further tightening of monetary policy was warranted by signs of sustained and broadening price pressures amid the ongoing normalization of monetary policy settings,” Medalla said.
He said the BSP was ready “to take further necessary actions to steer inflation towards a target-consistent path over the medium term in keeping with its price stability mandate”.
Elsewhere in Southeast Asia, Singapore’s central bank tightened its monetary policy on Thursday, also in an off-cycle move, to slow inflation as the city-state joins other countries ramping up efforts to control price pressures.
Philippine inflation surged to the highest level in nearly four years in June, and is widely expected to remain elevated, pushing the full-year average outside the 2%-4% target band.
READ: That high: What you need to know about inflation in the Philippines
—Reporting by Enrico Dela Cruz, Karen Lema and Neil Jerome MoralesEditing by Ed Davies
