By Kosaku Narioka
The Philippines’ central bank raised its benchmark interest rate for the first time in three-and-a-half years to help contain high inflation as the economy begins to outrun a slump caused by the coronavirus pandemic.
The Bangko Sentral ng Pilipinas on Thursday raised its benchmark overnight borrowing rate by 25 basis points to 2.25% and its corresponding lending rate by the same amount to 2.75%.
The central bank raised its key rate for the first time since November 2018 and joined other central banks in containing high inflation caused in part by the Russian-Ukrainian war, and reversing years of easing aimed at to support the economy, which has been hit by the pandemic.
Earlier this month, the Reserve Bank of Australia raised its key rate for the first time in more than a decade and India’s central bank also raised its key rate unexpectedly.
Five of seven economists polled by The Wall Street Journal expected the Philippines’ central bank to raise its key rate on Thursday, while the other two expected a hike in June and no change this month.
The country’s consumer price index in April rose 4.9% from a year earlier, above the central bank’s inflation target range of 2% to 4%, after a up 4.0% in March.
Government data showed last week that first-quarter gross domestic product rose 8.3% from a year earlier, following a 7.8% expansion in the October-December period. First-quarter GDP exceeded pre-pandemic levels.
Write to Kosaku Narioka at [email protected]