It’s been back-to-back rate hikes with the Bangko Sentral ng Pilipinas (BSP) announcing the decision to raise the interest rate by another 25 basis points (bps)to 2.5 percent.
This follows the 25-bps rate hike announced in May. BSP has followed other central banks in the region in policy tightening amid soaring inflation and a weakened peso.
“Given these considerations, the Monetary Board believes that a follow-through increase in the policy rate enables the BSP to withdraw its stimulus measures while safeguarding macroeconomic stability amid rising global commodity prices and strong external headwinds to domestic economic growth.
“The Monetary Board also reiterates its support for the carefully coordinated efforts of other government agencies as part of a whole-of-government approach in implementing non-monetary interventions to mitigate the impact of persistent supply-side factors on inflation,” the BSP media statement highlighted.
The local currency has depreciated to the 55-level against the US dollar with inflation hitting 5.4% last month. The BSP also raised the overnight deposit rate to 2% and lending rate to 3%.
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