Philippines: Central Bank Raises Key Interest Rates by 50 Basis Points
Today the Monetary Bord of Bangko Sentral ng Pilipinas (BSP) increased the key interest rates by 50 basis points. The interest rate for the overnight borrowing or reverse repurchase (RRP) facility was raised to 5.75% and the interest rate for overnight lending or repurchase (RP) facility was raised to 7.75%.
It the press release the central bank reaffirmed that in accordance with its mandate inflation control is the foremost priority of the BSP. The BSP’s baseline forecasts show the risk of inflation exceeding the inflation targets for 2008 and 2009. Price pressures have increased even as they are projected to ease starting late 2008. Second-round effects have set in, as evident in the rise in core inflation.
Additionally BSP raised its inflation estimate to a range of 9% to 11% today. Inflation may peak at 12% this October. In June inflation rate was already reported at 11.4%.
On June 5th the central bank already raised their key interest rates by 25 basis points. The next meeting of the Monetary Board is scheduled for August 28th, 2008.
