Thursday, July 17, 2008

Philippine Central Bank Raises Interest Rates

The Philippine central bank raised its benchmark interest rate by the most since 2000on 17 July and forecast inflation will exceed last month's 14-year high on record oil and food prices. Bangko Sentral ng Pilipinas increased the rate it pays banks for overnight deposits by 0.5 percentage point to 5.75 percent.

Fuel prices in the Philippines have risen every week since April and rice costs have jumped 70 percent this year - the Philippines is the world's biggest importer of rice and buys almost all of its oil from abroad.

Bangko Sentral increased its 2008 inflation estimate to a range of 9 percent to 11 percent today, from a previous prediction of 7 percent to 9 percent, citing a weak peso and higher food, transportation and energy costs.

GDP growth probably accelerated to 5.6 percent in the second quarter, the central bank also said today. The $118 billion economy expanded 5.2 percent in the first three months, the slowest in more than a year.

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