The Monetary Board, policy-setting body of the Bangko Sentral ng Pilipinas (BSP), raised interest rates by 50 basis points to curb inflation on Thursday which it says will ''accelerate further in the coming months.''

''We took this decisive action because we forecast inflation to accelerate further in the coming months due to oil prices, transport fares and the potential effects of El Nino on food prices,'' said Bangko Sentral ng Pilipinas Governor Eli Remolona in a press briefing.

''The numbers we were looking at, the forecasts, were worse than we thought. There were surprising developments on prices. so there was a bit of sense of urgency,'' added Remolona. Inflation last month rose to 7.2 percent.

The Monetary Board decided to raise the BSP’s Target Reverse Repurchase (RRP) Rate by 50 basis points to 5.5 percent, the Bangko Sentral ng Pilipinas (BSP) said.

The interest rates on the overnight deposit and lending facilities were adjusted to 5 percent and 6 percent, respectively.

This is the fourth rate increase by the central bank this year, bringing cumulative hikes to 125 basis points. Remolona said

''The BSP stands ready to take further monetary policy action as necessary to ensure the timely return of inflation to the target, in keeping with our price stability mandate,'' it said. PHS