Philippines' central bank raises key rate half a point to 5.50%

The Philippine central bank raised its benchmark interest rate by 50 basis points, or half a percentage point, to 5.50% on October 22. The larger-than-expected decision was its fourth consecutive increase, extending a series of rate rises as inflation accelerated and economic growth remained weak.

All 27 economists in a Reuters poll had expected the Bangko Sentral ng Pilipinas to raise the rate by just 25 basis points, or a quarter of a percentage point. The bank said its larger increase would make monetary policy appropriately restrictive—a stance intended to restrain borrowing and spending.

Rising prices and weak growth

CNA reported that annual inflation accelerated in September because rice, electricity, fuel and transport prices rose. Meanwhile, second-quarter economic growth was the weakest since 2021, reflecting a slump in construction and softer domestic demand.