Philippine hikes key policy rate 50 bps to combat inflation

MANILA, Aug 9 (Reuters) - The Philippine central bank raised its key overnight borrowing rate by 50 basis points on Thursday, saying a stronger follow through was needed to fight inflation that’s running at its highest level in more than five years.

The policy-making Monetary Board hiked the overnight borrowing rate to 4.0 percent, following up on rate increases of 25 basis points in May and again in June.

Thursday’s rate decision was widely expected with all 19 analysts in a Reuters poll predicting a hike. Twelve of the 19 forecast a 50 basis point hike, while the rest predicted a 25 basis point increase.

For July, the Philippines reported the annual inflation rate accelerated to 5.7 percent, from 5.2 percent the previous month.

Earlier on Thursday, the government announced that economic growth in the second quarter slipped to near three-year lows of 6.0 percent, compared with 6.7 percent forecast in a Reuters poll. (Reporting by Karen Lema and Neil Jerome Morales; Editing by Richard Borsuk)