Philippine central bank on Thursday raised interest rates for the first time in nearly four years, aiming to check inflationary pressure from President Rodrigo Duterte’s tax reform program.
The Bangko Sentral ng Pilipinas lifted its benchmark overnight lending rate by 25 basis points, to 3.25%, in its third policy meeting of the year. This is the first rate increase since September 2014, when the BSP adjusted its reverse repurchase rate by 25 basis points to 4%.
Inflation averaged 4.1% in the first four months of the year, breaching the ceiling of the bank’s 2% to 4% target range. Last month, inflation reached 4.5%, the highest level dating back to the new base year of 2012.