Bank of Philippines Raises Interest Rates for First Time Since 2018 in Hopes of Curbing Inflation

The Bank of the Philippines (BSP) raised its key interest rate by 0.25% to 2.25% at its May 19 meeting, the first time it has done so since 2018, to combat rising inflation.

The Philippines is the latest country in Asia to tighten monetary policy after India and Malaysia announced unexpected rate hikes this month to combat price pressures.

The rise in inflation and the disruption of supply caused by the lockdown measures imposed by China could affect consumer demand and jeopardize the recovery of the global economy.

The Philippine Consumer Price Index (CPI) currently stands at 4.9%, the second-highest in Southeast Asia, and well above the central bank’s target of 2% to 4%.

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