-- The Philippines raised its key policy rate by 25 basis points to 4.5% in a surprise move, citing worsening inflation risks, the Bangko Sentral ng Pilipinas (BSP) reported Thursday.
Analysts had expected the rate to remain steady at 1.25%.
The overnight deposit and lending facility rates were also adjusted to 4% and 5%, respectively.
The central bank said the inflation outlook has deteriorated due to the Middle East conflict, which has pushed up global oil, fertilizer, and domestic food prices. The headline inflation is now expected to exceed the 4% ceiling in both 2026 and 2027, with rising expectations increasing the risk of de-anchoring.
The BSP added that the rate hike is meant to keep inflation expectations under control while still supporting economic growth, and it will take further action if necessary.