15.11.201803:19:00UTC+00Philippine Central Bank Unexpectedly Hikes Key Rate By 25 Bps

The Philippines' central bank unexpected raised its key interest rate on Thursday.

The Monetary Board raised its benchmark interest rate by 25 basis points to 4.75 percent, the Bangko Sentral Ng Pilipinas said. Economists had expected the bank to leave rates unchanged.

Policymakers decided to raise the rate by quarter-point given the upside risks to the inflation outlook and given that inflation expectations have remained elevated as supply-side, possible wage pressures continue to drive price development, the bank said on Twitter.

Hence, the Monetary Board deemed it necessary to respond with proactive policy action to help temper the risks to the inflation outlook including those emanating from continued uncertainty in the external environment, the bank added.

The board continues to emphasize the need for follow-through non-monetary measures to mitigate the impact of supply-side factors on inflation and remains prepared to take appropriate policy actions as needed to ensure the achievement of its price and financial stability objectives, the BSP said.