Philippines central bank raises key rate to 5.5% as inflation pressures growth

The Bangko Sentral ng Pilipinas raised its key policy rate to 5.5 percent today, according to Nikkei Asia. The move comes as inflation erodes growth momentum in the Philippines, sharpening pressure on policymakers to restore price stability. Officials are tightening financial conditions to curb demand and anchor expectations amid persistent cost of living strains.

The benchmark now stands at 5.5 percent, a level that will feed through to bank lending rates for households and businesses, Nikkei Asia reports. Economists say the decision underscores the tradeoff between taming inflation and safeguarding a slowing expansion, and sets the tone for year end financing costs. Investors will watch the central bank’s statement, updated inflation projections, and signals on the path of future moves, along with immediate reactions in the peso and bond yields. [Developing. This article will be updated.]