Philippine Central Bank Hikes Rates By 25 Bps

(RTTNews) - The Philippine central bank lifted its key interest rates by 25 basis points on Thursday to control inflation expectations and mitigate the risk of second-round effects.

The Monetary Board of the Bangko Sentral ng Pilipinas decided to lift the reverse repurchase rate by 25 basis points to 4.75 percent.

The interest rates on the overnight deposit and lending facilities were adjusted to 4.25 percent and 5.25 percent, respectively.

Previously, the bank had raised the key interest rates by 25 basis points in April.

"Today's policy action will help keep inflation expectations anchored and mitigate the risk of second-round effects," the bank said in a statement.

The board said it will continue to be guided by incoming data and is prepared to take further monetary action as needed to ensure that inflation returns to the 3.0-percent target.

Inflationary pressures remain strong and rising core inflation suggests broadening price pressures and second-round effects, including higher inflation expectations.

The bank expects headline inflation to breach the 4.0-percent tolerance ceiling in both this year and next. In 2028, inflation is expected to settle slightly above the 3.0-percent target.