untitled design

Philippines: Central bank raises interest rate by 25 basis points

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

You may also like

Get the latest

Stay Informed: Get the Latest Updates and Insights

 

Most popular