The Bangko Sentral ng Pilipinas (BSP) raised its benchmark interest rate by 25 basis points to 4.75% on Thursday, continuing its campaign against persistent inflation. The move, which was widely expected by analysts, marks the second rate hike this year.
Despite easing to 6.8% in May, inflation remains well above the central bank's target range of 2% to 4%, staying elevated for the third consecutive month. The BSP cited sustained price pressures from global oil and fertilizer costs, which have pushed up domestic fuel and food prices. Rising core inflation also signals broadening price pressures and potential second-round effects.
"Today's policy action will help keep inflation expectations anchored and mitigate the risk of second-round effects," the BSP said in a statement. The central bank noted that higher borrowing costs are designed to curb spending by households and businesses, thereby easing inflation while supporting economic stability.
All 15 economists surveyed by the Inquirer had predicted the hike, with 12 correctly forecasting the quarter-point increase. The BSP emphasized that the measured tightening will complement fiscal measures to sustain consumption and business sentiment.