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Bloomberg
The Philippine central bank delivered its second 75 basis-point interest-rate increase of this year, as it sought to support the peso and cool inflation by matching the pace of hikes by the Federal Reserve.
Bangko Sentral ng Pilipinas raised the overnight reverse repurchase rate to 5%, as predicted by all but one in a Bloomberg survey of 24 economists. One analyst anticipated a half-point increase, although Governor Felipe Medalla had already flagged the three-quarter-point move.
Philippines has been at the forefront of monetary tightening in Southeast Asia, having raised rates by a total 300 basis points since May to cool one of the region’s fastest inflation at 7.7% and shore up its currency. The peso is Southeast Asia’s worst performer this year, with losses of more than 11%.
Elsewhere in Southeast Asia, Indonesia has pivoted to steeper increases to curb price pressures despite being a late entrant to the tightening club. Bank Indonesia is scheduled to announce its rate decision shortly, amid the rupiah emerging as Asia’s worst
performer this quarter.
For the Philippines, a weaker peso fans costs of importing staples from fuel to rice in a nation that’s experiencing the fastest price growth since December 2008.