The central bank of the Philippines raised the key interest rate to curb rising prices amid long-term prospects for higher inflation in the Southeast Asian country.
Bangko Sentral ng Pilipinas raised its overnight base lending rate by 25 basis points to 2.5% and the corresponding lending rate to 3%.
The bank said that “upward risks continue to dominate the outlook for inflation until 2023”, with potential pressures stemming from higher world prices (excluding oil) and a shortage of domestic fish supplies, among others.
He expects average inflation to exceed the 2% -4% estimate and reach 5% this year and 4.2% in 2023 before returning to 3.3% in 2024.
The consumer price index in the Philippines stood at 5.4% in May compared to 4.9% in April.
The central bank says an increase in interest rates will allow the central bank to reverse stimulus measures while ensuring macroeconomic stability amid rising world commodity prices and strong external barriers to domestic economic growth.
He added that the risks continue to be a weaker-than-expected global recovery and the possible return of coronavirus restrictions.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
