Money is counted at a foreign exchange counter in Manila. Jonathan Cellona, ABS-CBN News

MANILA -- The Bangko Sentral ng Pilipinas on Thursday raised its benchmark rate by 50 basis points on Thursday, after inflation breached its target for 5 straight months.

The highest increase in 10 years brought the overnight borrowing rate to 4 percent. It was also the third straight hike this year. The BSP earlier raised rates twice by 25-basis point increments.

"The BSP reiterates its strong commitment and readiness to take all policy actions to address the threat of high inflation and deliver on its primary mandate of price stability," BSP Governor Nestor Espenilla Jr. said.

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Ahead of Thursday's meeting, BSP Governor Nestor Espenilla reiterated the regulator's "firm commitment" to meet its 2 to 4 percent inflation target for the year.

Consumer prices rose 5.7 percent in July, exceeding the BSP's goal for the fifth straight month and quickening for the seventh straight month. It was also the highest in data since January 2013.

President Rodrigo Duterte's economic managers have outlined several measures to cushion the impact of inflation, including taxing rice imports to help bring down the price of the staple and cash subsidies for the poor.

Former President Gloria Macapagal-Arroyo, who is now Speaker of the House of Representatives, last month asked Duterte to "do something" about rising prices and had met with his economic team.

"Should price pressures continue to rise through the third quarter, the risk would be of further tightening at the September 27 meeting... and another 25 bp hike in the fourth quarter," Benjamin Shatil, ASEAN economist at JPMorgan, said in a note.

Standard Chartered's Asia economist Chidu Narayanan meanwhile said today's rate hike is likely the last for this year.

"I don't think they (BSP) will be hiking again after today's meeting because, partly, I think inflation would top out in August. I mentioned 6 percent," Narayanan said in an interview with ANC's Market Edge.

Narayanan said he expects inflation to go down in the 4th quarter and to average 4.4 percent in 2019.

Espenilla said the Monetary Board decided to hike rates after assessing that the economy could handle a further tightening of monetary policy settings.

Economic growth slowed to 6 percent in the second quarter, missing expectations due to the temporary shutdown of Boracay Island, the continued closure of several mines and other recent policy actions.

The increase on Thursday made the Philippines the second regional central bank, after Indonesia, to hike at 3 consecutive meetings this year to seek to shore up a struggling currency.

Like Indonesia, the Philippines is grappling with a widening current account deficit which adds more pressure on the currency already hit by higher US rates and in jeopardy of more damage from the China-US trade war.

The peso has lost 5.6 percent against the dollar this year, and has contributed to inflation, which could further hurt domestic consumption, the bedrock of the Philippine economy.

The peso closed at 53.09 to the dollar Thursday.

-- with a report from Reuters