This is from marketwatch.
This may slow down the economy. The stock market does not show much confidence in the economy but then stock markets around the globe are mostly doing badly now. Although the Philippine peso is not doing that well compared to other Asian currencies I imagine it is faring rather better against the U.S. dollar!
Philippines hikes rates more than expected to curb inflation
By Polya Lesova
Last update: 10:20 a.m. EDT July 17, 2008
NEW YORK (MarketWatch) -- The central bank of the Philippines raised its key interest rate by 50 basis points to 5.75% on Thursday in a move to fight inflation. The bank said its baseline forecasts show the risk of inflation exceeding the inflation targets for 2008 and 2009. "Authorities believe that the series of policy adjustments will help to steer inflation towards its desired path for the medium term," the bank said in a statement. Most analysts had expected a hike of only 25 basis points. "This sparked an impressive 1.2% rally in the peso, which is still off about 7.7% for the year, making it among the worst performing Asian currencies," said currency strategists at Brown Brothers Harriman. In Manila, the PSE stock index finished up 0.8%. It is down 34% year-to-date.