Philippines Central Bank Raises Policy Rate to Help Limit Inflation


By Kosaku Narioka

The Philippine central bank unexpectedly raised its benchmark interest rate in a bid to help contain inflation.

The Bangko Sentral ng Pilipinas on Thursday increased its benchmark overnight borrowing rate by 75 basis points to 3.25% and its corresponding lending rate by the same amount to 3.75%.

Gov. Felipe Medalla said significant tightening is needed due to signs of sustained, broadening price pressures.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

By Kosaku Narioka

The Philippine central bank unexpectedly raised its benchmark interest rate in a bid to help contain elevated inflation.

The Bangko Sentral ng Pilipinas on Thursday increased its benchmark overnight borrowing rate by 75 basis points to 3.25%, and its corresponding lending rate by the same amount to 3.75%.

Governor Felipe Medalla said significant tightening was needed because of signs of sustained, broadening price pressures.

The country’s consumer-price index in June rose 6.1% from a year earlier, well above the central bank’s inflation target range of 2%-4%. First-quarter gross domestic product increased 8.3% from a year earlier and surpassed levels seen prior to the pandemic.

The Philippine central bank in May raised its policy rate for the first time in three and a half years, by 25 basis points, and followed with another 25-basis-point increase in June.

Central banks globally are responding to rising inflation caused by a recovery from the Covid-19 pandemic and the Russia-Ukraine war.

Earlier Thursday, the Monetary Authority of Singapore tightened monetary policy, in an unexpected move.

Write to Kosaku Narioka at kosaku.narioka@wsj.com



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